If you think standard car
insurance would be sufficient to cover you in the event of an accident or theft
of your vehicle, then you could be disappointed.
Standard car insurance will only cover you for the current market price of your vehicle. So if your vehicle has depreciated in value since you bought it, or you took out finance to pay for it, you could find yourself out of pocket in the event of your vehicle being stolen or damaged beyond repair.
Guaranteed Asset Protection (GAP) insurance covers the difference between the cost you paid for your car and its current market value, whether that's now or several years in the future. It gives you peace of mind that if you do need to replace your vehicle then you will have enough money to buy a like-for-like model or to pay off any outstanding finance or loans.
GAP insurance is particularly beneficial when buying a new car which can depreciate in value very quickly as soon as it leaves the forecourt or if you have bought an expensive car and you are concerned you might not have enough money to replace it with an identical make or model in the event of an accident or theft.
There are different types of policy available:
Standard car insurance will only cover you for the current market price of your vehicle. So if your vehicle has depreciated in value since you bought it, or you took out finance to pay for it, you could find yourself out of pocket in the event of your vehicle being stolen or damaged beyond repair.
Guaranteed Asset Protection (GAP) insurance covers the difference between the cost you paid for your car and its current market value, whether that's now or several years in the future. It gives you peace of mind that if you do need to replace your vehicle then you will have enough money to buy a like-for-like model or to pay off any outstanding finance or loans.
GAP insurance is particularly beneficial when buying a new car which can depreciate in value very quickly as soon as it leaves the forecourt or if you have bought an expensive car and you are concerned you might not have enough money to replace it with an identical make or model in the event of an accident or theft.
There are different types of policy available:
• A Return to Invoice policy will cover the difference between your settlement and the amount you paid for the car.
• Return to Value policies are available for cars bought privately or at auction. When you take out the policy an independent assessment will be carried out to determine the current market value of your car. This will be the most you will be able to claim for your vehicle if it is stolen or damaged beyond repair.
• Finance GAP insurance covers you for any outstanding finance or loan agreements on the car.
• You can combine a Finance and RTI policy which will cover you for the original price of the vehicle or clear the outstanding finance, whichever is the greater.
• Vehicle Replacement Insurance covers the cost of replacing your car with a like-for-like new model, even if the retail price has increased since you bought it. You will get a brand new replacement of the same make, model and specification of your vehicle or you will get the latest equivalent. If your car is second hand, your replacement car will be closely matched in terms of mileage and specifications.
When buying GAP insurance consider whether your policy covers the excess you will need to pay on your standard car insurance policy, the maximum cover you will need and how long you want the policy to cover. Gap insurers generally offer policies for between one and five years.
You will also want to consider the maximum value the insurer is willing to pay out for your vehicle, the age of your car and whether any other restrictions apply, for example some insurers have mileage limits. It may be helpful to shop around and compare policies online to get the best deal.
Click here to find more about Auto Trader
Gap Insurance.
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