Gap Insurance vs VRI Insurance: Protecting Your Investment

Are you considering buying a new car? If so, you’ve probably been told that you need to get insurance. But what kind of insurance do you need? There are many different types of insurance policies available, and it can be tough to figure out which one is right for you. In this article, we’ll be looking at two popular types of car insurance: Gap insurance and VRI insurance.

What is Gap Insurance?

Gap insurance is a type of insurance that covers the difference between the amount you owe on your car and the amount that your car is worth. For example, let’s say you buy a car for £25,000 and you take out a loan for £20,000. If you get into an accident and your car is written off, your car insurance will only pay you the current market value of the car, which might be less than what you owe on your loan. Gap insurance would cover the difference, so you wouldn’t be stuck paying for a car that you no longer have.

What is VRI Insurance?

VRI insurance stands for Vehicle Replacement Insurance. This is a type of insurance that covers the cost of replacing your car if it is stolen or written off in an accident. Unlike gap insurance, which only covers the difference between what you owe and what your car is worth, VRI insurance covers the entire cost of replacing your car with a brand new one.

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Related Reading: Does GAP Insurance Cover A Stolen Car?

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Key Differences between Gap Insurance and VRI Insurance

• Coverage: Gap insurance covers the difference between what you owe on your car and what your car is worth, while VRI insurance covers the entire cost of replacing your car with a new one.
• Cost: Gap insurance is usually less expensive than VRI insurance.
• Eligibility: Gap insurance is typically available for both new and used cars, while VRI insurance is usually only available for new cars.

Do I Need Gap Insurance or VRI Insurance?

Whether you need gap insurance or VRI insurance depends on your individual situation. Here are a few things to consider:

• How much do you owe on your car? If you owe more than your car is worth, you might want to consider gap insurance.
• How old is your car? If your car is brand new, you might want to consider VRI insurance. If it’s older, gap insurance might be a better choice.
• What kind of coverage do you already have? If you have comprehensive and collision coverage, you might not need gap insurance or VRI insurance.

How to Choose Between Gap Insurance and VRI Insurance

Here are some factors to consider when choosing between gap insurance and VRI insurance:

• Cost: Gap insurance is usually less expensive than VRI insurance, so if cost is a concern, gap insurance might be the better choice.
• Age of car: If your car is brand new, VRI insurance might be a better choice, as it covers the cost of replacing your car with a brand new one. If your car is older, gap insurance might be a better choice.
• Amount owed on car: If you owe more than your car is worth, gap insurance is probably the better choice.
• Coverage already in place: If you already have comprehensive and collision coverage, you might not need either gap insurance or VRI insurance.

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Related Reading: Car Gap Insurance and Vehicle Depreciation

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Gap Insurance vs VRI Insurance FAQs

Q. Can I get gap insurance and VRI insurance at the same time?

Yes, it’s possible to have both gap insurance and VRI insurance. However, it might not be necessary to have both, as they cover different aspects of your vehicle.

Q. Can I buy gap insurance or VRI insurance after I’ve already bought my car?

It depends on the insurance provider. Some insurance companies will let you buy gap insurance or VRI insurance after you’ve already bought your car, while others require you to buy it at the same time you purchase your vehicle.

Q. Is VRI insurance worth the extra cost?

It depends on your individual situation. If you have a brand new car and you want the peace of mind that comes with knowing you can replace it with a new car if it’s written off, then VRI insurance might be worth the extra cost. However, if you have an older car or you’re trying to save money on insurance, gap insurance might be a better choice.

Q. Can you pay Gap Insurance monthly?

Gap Insurance vs VRI Insurance Summary

Gap insurance and VRI insurance are two different types of car insurance policies that cover different aspects of your vehicle. Gap insurance covers the difference between what you owe on your car and what your car is worth, while VRI insurance covers the cost of replacing your car with a brand new one. Whether you need gap insurance or VRI insurance depends on your individual situation, such as how much you owe on your car, how old your car is, and what kind of coverage you already have. By considering these factors, you can choose the right insurance policy for your needs and protect yourself financially in the event of an accident or theft.

At Click4Gap we offer two specific types of Gap Insurance. RTI (Return to Invoice) and Lease Hire.

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Related Reading: The Different Types of Gap Insurance

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RTI Gap Insurance: What It Is and Why You Need It

If you’re buying a new car, you may have heard of something called RTI gap insurance. It’s an optional type of car insurance that can help you avoid financial loss in the event your car is stolen or written off. In this article, we’ll explain what RTI gap insurance is, how it works, and why you might need it.

What is RTI gap insurance?

RTI gap insurance stands for Return to Invoice gap insurance. It’s a type of car insurance that helps protect you against financial loss if your car is stolen or totaled. Specifically, RTI gap insurance covers the difference between the amount you paid for your car and the amount your insurance company will pay out if your car is deemed a total loss.

How does RTI gap insurance work?

Let’s say you bought a brand new car for £30,000. A few months later, the car is stolen and never recovered. Your car insurance company determines that the car was worth £25,000 at the time it was stolen and offers you a settlement for that amount. Without RTI gap insurance, you would be out the £5,000 difference between what you paid for the car and what your insurance company will pay out.

However, if you have RTI gap insurance, the policy would cover the £5,000 difference, so you wouldn’t have to pay out of pocket.

Why do you need RTI gap insurance?

RTI gap insurance can be especially useful if you’ve taken out a loan to pay for your car. If you owe more on your car loan than your car is worth at the time it’s stolen or written off, you could end up owing money to the lender even after you receive an insurance payout. RTI gap insurance can help cover that difference, so you don’t have to worry about paying off a loan on a car you no longer have.

Who should consider RTI gap insurance?

RTI gap insurance is a good option for anyone who is buying a new car, especially if you’re taking out a loan to pay for it. However, it may not be necessary if you’re buying a used car or if you can afford to pay the difference out of pocket in the event your car is stolen or written off.

How to get RTI gap insurance

You can typically purchase RTI gap insurance through your car dealership or through an insurance company. It’s important to shop around and compare prices, as the cost of RTI gap insurance can vary depending on your car, your location, and other factors. Visit Click4 Gap for an instant quote.

RTI gap insurance vs. regular car insurance

It’s important to note that RTI gap insurance is not a replacement for regular car insurance. Rather, it’s an add-on policy that can provide additional protection in the event your car is stolen or written off. You’ll still need to have regular car insurance to meet legal requirements and protect yourself against other types of damage or loss.

What does RTI gap insurance cover?

RTI gap insurance covers the difference between the amount you paid for your car and the amount your insurance company will pay out in the event of a total loss. This can include the cost of any optional extras or accessories you added to the car, as well as any outstanding finance on the vehicle.

What does RTI gap insurance not cover?

RTI gap insurance does not cover regular wear and tear on your car, damage to your car from accidents or other incidents, or mechanical or electrical breakdowns. It also typically does not cover the deductible or excess on your regular car insurance policy.

How much does RTI gap insurance cost?

The cost of RTI gap insurance can vary depending on a number of factors, including the make and model of your car, your location, your driving history, and the level of coverage you choose. However, it typically costs around 5-10% of the value of your car.

How to file a claim with RTI gap insurance

If your car is stolen or totaled, you’ll need to file a claim with both your regular car insurance company and your RTI gap insurance provider. Your regular car insurance company will handle the initial claim, and then you’ll need to provide the necessary documentation to your RTI gap insurance provider to receive the additional payout.

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Related Reading: What is RTI Gap Insurance?

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RTI Gap Insurance FAQ

Q. Is RTI gap insurance required by law?

No, RTI gap insurance is not required by law. It’s an optional add-on policy that can provide additional protection for car owners.

Q. Can I purchase RTI gap insurance after I’ve bought my car?

Yes, you can typically purchase RTI gap insurance at any time, although it’s usually less expensive if you purchase it at the same time you buy your car.

Q. Can I cancel my RTI gap insurance policy if I no longer need it?

Yes, you can usually cancel your RTI gap insurance policy at any time. However, you may not be eligible for a full refund depending on the terms of the policy.

Q. Do I need RTI gap insurance if I have a lease on my car?

If you’re leasing a car, you may not need RTI gap insurance as it’s often included in the lease agreement. However, it’s important to check the terms of your lease to make sure.

Q. Is RTI gap insurance worth the cost?

Whether RTI gap insurance is worth the cost depends on your individual circumstances. If you’ve taken out a loan to pay for your car or you can’t afford to pay the difference in the event of a total loss, RTI gap insurance can provide valuable protection.

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Related Reading: What Are The Requirements For Gap Insurance?

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RTI Gap Insurance Summary

RTI gap insurance can be a valuable add-on to your car insurance policy, especially if you’re buying a new car or taking out a loan to pay for it. It can help protect you against financial loss in the event your car is stolen or written off, and can give you peace of mind knowing that you won’t be left with a large bill to pay. Be sure to shop around and compare prices to find the best RTI gap insurance policy for your needs.

Lease Hire Gap Insurance: What it is and Why You Need it

If you’re considering leasing a car, you may have heard about lease hire gap insurance. This type of insurance can provide financial protection in the event of theft, total loss or damage to your leased vehicle. But what exactly is lease hire gap insurance, and why do you need it? In this article, we’ll answer these questions and provide you with everything you need to know about lease hire gap insurance.

What is Lease Hire Gap Insurance?

Lease hire gap insurance, also known as gap insurance, is a type of insurance policy that covers the difference between the amount you owe on your leased car and the actual cash value (ACV) of the car in the event of a total loss. Gap insurance is designed to protect you from financial loss in case your leased car is stolen or written off and your insurance settlement is not enough to cover your remaining lease payments.

How does Lease Hire Gap Insurance Work?

Let’s say you have a three-year lease on a car with a value of £30,000. After one year, the car is stolen, and your insurance company declares it a total loss. Your insurance company determines that the ACV of the car is £20,000. However, you still owe £25,000 on your lease. In this case, lease hire gap insurance would cover the £5,000 difference between what you owe and the ACV of the car.

Who Needs Lease Hire Gap Insurance?

Lease hire gap insurance is not required by law, but it can be a valuable addition to your insurance coverage if you’re leasing a car. If you’re planning to lease a car, you should consider purchasing lease hire gap insurance if:

• You have a high-mileage lease
• You’re putting little or no money down on the lease
• You’re leasing a car with a high depreciation rate
• You’re leasing a luxury car

Benefits of Lease Hire Gap Insurance

Lease hire gap insurance can provide several benefits, including:

• Protection against financial loss in case of total loss or theft of your leased vehicle
• Coverage for the difference between the ACV of your leased vehicle and the amount you owe on your lease
• Peace of mind knowing that you won’t be responsible for paying the remaining lease payments if your car is stolen or written off

Limitations of Lease Hire Gap Insurance

While lease hire gap insurance can be a valuable addition to your insurance coverage, it’s important to note that it does have limitations.

For example: Gap insurance only covers the difference between the ACV of your leased vehicle and the amount you owe on your lease. It does not cover any deductible you may have on your primary insurance policy.

Gap insurance may not cover all of the fees and charges associated with your lease, such as excess mileage or wear and tear charges.

Types of Lease Hire Gap Insurance

There are two main types of lease hire gap insurance:

Finance gap insurance: Covers the difference between the amount you owe on your lease and the ACV of your car in case of a total loss.

Return-to-invoice gap insurance: Covers the difference between the price you paid for the car and the ACV of the car in case of a total loss.

How to Choose the Right Lease Hire Gap Insurance

When choosing lease hire gap insurance, it’s important to consider a few factors, including:

• The type of lease you have
• The value of your car
• The length of your lease
• Your personal financial situation

To choose the right lease hire gap insurance policy, you should compare different policies and their coverage options, as well as their costs. Make sure to read the terms and conditions carefully and understand the limitations and exclusions of each policy before making a decision.

How Much Does Lease Hire Gap Insurance Cost?

The cost of lease hire gap insurance can vary depending on several factors, including:

• The value of your car
• The length of your lease
• The type of lease hire gap insurance you choose
• Your personal driving record

Typically, lease hire gap insurance costs between 5% and 10% of the total cost of your primary insurance policy. It’s important to compare quotes from different insurance providers to find the best coverage at the most affordable price.

How to Buy Lease Hire Gap Insurance

Lease hire gap insurance is typically offered by insurance providers, car dealerships, and leasing companies. You can purchase gap insurance when you sign your lease agreement, or you can purchase it separately from an insurance provider. Make sure to compare different policies and their coverage options before making a decision.

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Related Reading: Car Lease vs Contract Hire vs HP vs PCP: What Is The Difference?

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Lease Hire Gap Insurance FAQ

Q. Is lease hire gap insurance worth it?

Lease hire gap insurance can provide valuable protection in case of a total loss or theft of your leased vehicle. If you’re leasing a car, it’s worth considering gap insurance to protect yourself from financial loss.

Q. Can I add gap insurance to my existing car insurance policy?

Some insurance providers offer gap insurance as an add-on to their primary insurance policies. You can also purchase gap insurance separately from an insurance provider.

Q. Is lease hire gap insurance required by law?

No, lease hire gap insurance is not required by law, but it can be a valuable addition to your insurance coverage if you’re leasing a car.

Q. Does gap insurance cover excess mileage charges or wear and tear charges?

No, gap insurance only covers the difference between the ACV of your leased vehicle and the amount you owe on your lease in case of a total loss.

Q. Can I cancel my gap insurance policy?

Yes, you can usually cancel your gap insurance policy at any time. Make sure to read the terms and conditions of your policy and understand any fees or penalties associated with canceling.

Lease Hire Gap Insurance Summary

Lease hire gap insurance can provide valuable protection in case of a total loss or theft of your leased vehicle. If you’re considering leasing a car, it’s worth considering gap insurance to protect yourself from financial loss. When choosing a gap insurance policy, make sure to compare different policies and their coverage options, as well as their costs. By doing your research and understanding your options, you can find the right gap insurance policy to meet your needs and budget.

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Do You Need Gap Insurance?

If you purchase or lease a new or nearly-new vehicle (up to four years old), this is the period of time your car depreciates the fastest. During this time you should seriously consider Gap Insurance.

Choosing The Right Gap Insurance For Your Car

Whichever method you choose to pay, there is a GAP insurance policy that is right for your vehicle, personal circumstances and financial position. GAP insurance is available for new and used cars.

Combined Return to Invoice Gap Insurance

If you paid cash for your vehicle, or paid a sizeable deposit, or if you financed it, Combined RTI Gap cover will pay out the shortfall between the cost of your vehicle and the market value at the point of claim, which is the amount your motor insurer will cover. This is cover that will protect you no matter if you use your vehicle for private use or for business.

Lease/Contract Hire Gap Insurance

If you leased your vehicle or it is under a contract hire agreement, Lease/Contract Hire Gap Insurance will cover you for the shortfall on your lease agreement, after your motor insurer settlement. If, for any reason, you change your vehicle within the first 90 days from the start date, we will also arrange to transfer your cover to your new vehicle without hassle or charge.

Can you pay Gap Insurance monthly?

Contact Click4Gap Today!

Looking to take out GAP insurance? We are here to help. Hop on our Live Chat, call us any time Monday to Friday, 9am to 5pm on 0208 819 3424, or Email us and we’ll get back to you during office hours.

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Related Reading: Click4Gap Ranked #1 On MoneySavingExpert For Gap Insurance

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