Gap Insurance

Gap Insurance - Explained

What is Gap Insurance?

Gap Insurance is a valuable supplement to protect you and your vehicle if you were to be involved in an accident and it is beyond repair, or have your vehicle stolen.

Finance gap insurance basically is the difference between what you still owe your finance company and the insurance pay-out you receive if your vehicle is written off or stolen.

Motor vehicles value quickly depreciates, therefore the gap between price you have paid plus interest on your financial agreement and the actual value of your vehicle will continue to grow as your vehicle continues to depreciate.

Gap insurance has grown in popularity in recent years as customers are increasingly being made aware of the risks that are involved with car loans.

To purchase gap insurance we recommend that you visit either Tickdirect or Click4Gap.co.uk the gap insurance specialists or Helpucover

Reasons to take out Gap Insurance

Every day in the UK more than 500 vehicles are involved in accidents whether minor or major over half a million vehicles are total write-offs each year.

• A vehicle is stolen every 2 minutes in the UK
• UK Car Crime accounts for up to a fifth of all crime in the UK
• Cars are now seemingly depreciating at a far greater rate than ever before
• Motor Insurance settlements are usually less than the price you pay for your car
• You are paying for the actual deprecation on your car, not your motor insurer.
• Write-offs occur all too often, protect yourself and your money.

An example of how the gap between what you owe on your car and it’s actual value increases, is set out below:

Scene 1:

You invest in a vehicle costing £12,000 in a period of 3 years your vehicle could depreciate by 50%. Now your vehicle is only worth £6,000

Scene 2:
Your vehicle is involved in an accident were it is no longer roadworthy, or it is stolen?

Scene 3:
The insurance company agrees to pay £6,000 the value of your vehicle at the time of the theft or accident

Scene 4:
You receive £6,000 however, that’s a shortfall of £6,000 to get a car similar to your (original £12,000) You will now have to add some extra cash to top-up the full price of the original price

Scene 5:
Good news if you purchase from gap insurance when you originally invested in the vehicle and arranged vehicle insurance you can receive the full £6,000 difference to purchase your next vehicle.

Scene 6:
Brilliant news you can now buy a similar vehicle to the one you originally purchased. All by taking out Gap insurance.