Little-Known Auto Insurance Could Save You Thousands Of Dollars After An Accident This Winter

Buying a new car is always an exciting event, but you could owe thousands of pounds if it’s written off before you’ve paid for it.

Each year about half a million vehicles go unreadable and beyond the point where repairs make financial sense, however, because insurance companies will only pay the “market rate” for a write-off can leave a huge sum in what you still owe.

Leading automotive association MotorEasy has revealed how a Guaranteed Asset Protection (GAP) insurance policy eliminates that risk and effectively redeems you from your contract, potentially saving you from being left out – especially at this time of year. , as road conditions change due to seasonal climate changes.

Founder and CEO Duncan McClure Fisher said, “The write-off of a vehicle by your insurance company can be a traumatic event. Not only have you probably been involved in a serious incident, but you could also be facing a serious financial deficit due to the reimbursement of market value alone.

“Even if you can afford to replace it with a new vehicle, it will almost certainly be well below the specifications of the one you lost, but having a proper GAP insurance policy is essential to avoid that. “

“With the popularity of leasing and financing arrangements, such as the PCP [a form of hire purchase vehicle finance], you could owe thousands of pounds if your vehicle is written off.

“GAP insurance eliminates this risk and effectively redeems you from your contract. “

GAP insurance is divided into three main categories depending on the age of your vehicle.

Vehicle Replacement Insurance (VRI) is for cars less than three months old and with less than 500 miles on the odometer. It covers the difference between the payment from your insurer and the balance required for the purchase of a replacement or similar vehicle.

GAP Return to Invoice (RTI) insurance, also known as “Back to Invoice” is for cars up to 10 years old and with less than 100,000 miles on the odometer, depending on your provider.

You must have purchased your car from a dealership within the past three to six months and the vehicle must be owned directly or with financing.

This type of policy covers the difference between the insurer’s payment and either the price you originally paid or the amount needed to settle your outstanding financial balance, whichever is greater.



GAP insurance is divided into three main categories depending on the age of your vehicle.

The final category is Return to Value (RTV), which again caters to cars under ten years old and under 100,000 miles.

These may have been purchased privately or from a dealer, and coverage is the difference between your insurer’s payment, based on present value, and the original value, which is calculated from the policy start date.

Finance agreements, which include hire-purchase, PCP, and leasing, remain the most popular methods of getting a car without having to fork out the money in one lump sum up front.



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About 90% of cars and vans in the UK have some sort of finance deal, but many people only consider the monthly cost, without thinking about what would happen if they were written off.

“This is why GAP insurance is so important, because the last thing you want is having to pay a large amount of money for a vehicle you no longer own. Having the right policy in place means you’re covered to settle a previous contract and then shop around for your next financing deal, ”Duncan added.

However, he also urged caution when reading the fine print of any GAP insurance policy, as some will only cover you when a car is stolen or declared a total loss.

Others offer more comprehensive protection, including traffic accidents, fire and theft.

He said: “If you are looking for suppliers, it is also useful to check the maximum available claim limit, as it can vary from company to company.”

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