You can't have your vehicle on the road without motor insurance, right? And even though your cover will be fully-comp, you may still be at risk of losing money if your brand-new vehicle was written off or stolen. So, how can GAP insurance help you? Vanarama's Lexi Birch reports...
Take this as an example: if your vehicle was deemed a total loss and your insurance company decides to pay out £15,000 but then your finance company requires £20,000 to settle your agreement early, you will be out of pocket by £5,000 (shortfall).
_ "Why would my insurance payout not be enough to cover any shortfall?" _
What AM I actually covered for?
Your fully-comp insurance covers the vehicle value and the insurance company is not responsible for any outstanding finance. Insurance companies will depreciate the value of your vehicle as soon as it is driven off the forecourt, and consequently this may not be enough to cover any remaining finance.
Is GAP Insurance worth it?
Most customers take out GAP for their own peace of mind, to have the reassurance that if anything were to happen to their vehicle, GAP will cover them. For context 52% of Vanarama's customers have taken out GAP Insurance so far in 2017...
_ "That's all well and good, but does it work?" _
Story time…
On the 1st March 2017, one of our customers had their Ford Transit Custom delivered on the brand new '17 plate. Exactly a week later (the same day their contract went live with the funder), their vehicle was stolen. On a 5-year Contract Hire agreement, this customer's shortfall amounted to approximately £7,000 *Ouch*. Thankfully our customer had taken out GAP Insurance, so they could sleep easy!
However… A member of our Vanarama team had been driving her vehicle for a mere 21 days before it was taken out by a gritter lorry on Christmas Eve and was deemed a total loss. Unfortunately she did not have GAP Insurance, so she had to fork out £3,500. Not quite the Christmas present she was hoping for…w_ho would you rather be?_
