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Gap Insurance for Hybrid & Electric Vehicles
Why Gap Insurance is Essential for Hybrid & Electric Vehicles
If you’re new to electric vehicle (EV) ownership, or you’ve had one before, you’ll understand that purchasing an EV can represent a significant financial investment.
Protecting yourself from the financial impact of your hybrid or electric vehicle being declared a total loss is essential, and the best way to do this is through a Guaranteed Asset Protection (GAP) Insurance policy.
A popular form of protection amongst EV owners, GAP Insurance could save you from considerable financial impact should your vehicle be written off, especially if you used a finance agreement to help you purchase it.
Keep reading to find out how you can secure instant peace of mind with GAP Insurance for your hybrid or electric vehicle.
Understanding Gap Insurance
Combined Return to Invoice GAP Insurance covers the difference between the amount your motor insurer pays out after a total loss and the purchase value of your vehicle, or the outstanding balance on your finance agreement, including early settlement penalties.
In the unfortunate event your vehicle is stolen or involved in an accident that results in a total loss, your motor insurer will typically only cover the current market value of the vehicle on the date of the loss, not what you bought it for.
With electric and hybrid vehicles typically having higher purchase prices, the pay-out your offered could be substantially less than what you paid for your vehicle. This gap can leave you with a significant financial burden, never mind the cost and frustration of finding a replacement vehicle.
Why Hybrid and Electric Vehicles Need Gap Insurance
Hybrid and electric vehicles are the future of motoring, and you want to keep yours on the road for as long as possible. However, total losses are an unfortunate fact of everyday driving. With GAP Insurance, you can enjoy the peace of mind knowing you’ve got the cover you need in place if your vehicle does get written off.
Here’s why GAP Insurance is a must-buy for new and used Hybrids and EVs:
- Depreciation – The value of your vehicle will depreciate rapidly, especially if its new or nearly new. But depreciation is a fact for all vehicles. This means that if your car is declared a total loss, you will be left with a gap between your motor insurance payout and the price you paid for the vehicle.
- Loan-to-value ratio – If you bought your vehicle using a finance agreement the loan amount could become more than the vehicle is worth due to the effect of depreciation. This problem could impact you even more if you used a small down payment.
- Financial stability – In the event of a total loss, the financial impact can be significant. GAP Insurance helps maintain your financial stability by covering the shortfall between your motor insurer pay-out and the purchase value of the vehicle or the remaining balance on your finance agreement, whichever is greater.
Benefits of Gap Insurance for Hybrid and Electric Vehicles
- Financial safety net – With the costs of vehicle ownership rising, it makes sense to protect yourself from significant financial burdens that could occur in the future.
- Like-for-like replacement vehicle – Without GAP Insurance, you won’t be able to replace your hybrid or electrical vehicle with a like-for-like replacement using the payout from your motor insurer. With GAP Insurance, you can! It’s as simple as that.
- Peace of mind – Having extra financial protection in place lets you enjoy your new vehicle without the worry of a potential set back.
Why Choose Click4Gap?
- Experience with Hybrid and Electrical Vehicles: You’ll need a provider with a proven track record in covering your type of vehicle. Our experience will make sure we have an understanding of the unique risks and requirements of your specific vehicle.
- Coverage Options: We offer flexible coverage options tailored to the needs of all vehicle owners.
- Customer Service: Our excellent customer service record will provide you with responsive and knowledgeable assistance that will be delivered promptly in the event of a claim.
- Reputation: Our reputation in the industry as GAP Insurance experts and our customer testimonials will give you a gauge of our reliability and service quality.
How Gap Insurance Works
Understanding how GAP Insurance works can help you make an informed decision. Here’s a step-by-step overview of the process:
- Purchase GAP Insurance: Whether you purchase a new or used electric / hybrid vehicle outright or use a loan, you can take out Click4Gap Gap Insurance that will cover your new vehicle right away.
- Total Loss Occurs: If your vehicle is involved in an accident and deemed a total loss, or it’s stolen and not recovered, your motor insurance will pay out the current market value of the vehicle.
- Claiming the Shortfall: Your Click4Gap cover will make up the difference between your motor insurance payout and the purchase price of your vehicle, or the remaining balance on your finance agreement, ensuring you aren’t left with a financial shortfall.
Real-Life Scenario
Imagine you new pride and joy is stolen or involved in a severe accident and is declared a total loss.
covered by your
motor insurer
Possible shortfall amount,
for your account
If you paid £16,500 cash for your car and a year or so later it’s declared a total loss, after your motor insurance pay-out you could have a shortfall of as much as £5,300. If you have Gap Insurance, this shortfall would be covered in total up to an amount of £75,000, subject to the policy terms, plus up to £1,500 for dealer-fitted accessories and £500 towards your motor insurance excess.
Common Misconceptions About Gap Insurance
- Only for Financed Vehicles: Many people believe that GAP Insurance is only necessary when you purchase a vehicle with finance. However, all electric and hybrid vehicles depreciate in value and could see you facing a large cost to replace your vehicle whether you used cash or a loan to buy it.
- Expensive: Some think GAP Insurance is costly, but it is often quite affordable for most vehicles, especially when considering the financial protection it offers. Shopping online will give you access to the best prices.
- Unnecessary with Motor Insurance: Even with comprehensive motor insurance, you may still have purchased your vehicle for a significant amount more that its current value, or the balance on your finance agreement may be more than the vehicle’s market value on the date of loss.
Alternatively, for more information on Gap Insurance for hybrid and electric vehicles, call us on 0208 819 3424, weekdays during office hours. Our team of experts is waiting to help you find the best coverage for your needs.
If you’re interested in Gap Insurance for other types of vehicles, such as driving school vehicles, taxis, or motorbikes, mopeds, and scooters, we have specialised pages to provide detailed information on these options.
