Although Motor Insurance is a legal requirement for every Motor Vehicle on the road it does not always cover you for the full amount of the finance remaining. Motor Insurance companies are always try to pay the smallest amount they can for the vehicle which can leave you with no vehicle to drive and a finance shortfall you cannot afford.
You should ask yourself:
How would I fund the shortfall?
Could I even afford this at short notice, would I struggle and even potentially put myself/ company into debt?
How would my business, customers and finances be affected?
How does it Work?
Gap Insurance is a product that is designed to lessen the financial impact a Total Loss can have on your business. Although there are many benefits with both Purchasing a vehicle, leasing or hiring a vehicle Motor Insurance Companies will tend to pay out the smallest amount they can leaving you with a significant amount to pay back to the finance company or a few thousand pound lost, should you have paid cash for the vehicle.
Finance GAP Insurance
This covers the difference between the minimum Market Value your Motor Insurance Company will pay out at the point of a Total Loss/ write off and the finance settlement (known as the shortfall) which you will be liable to pay back to the company financing your vehicle. If you do not have GAP Insurance, regardless why your vehicle is a Total Loss, whether your fault or not, they will still hold you liable for the remaining balance.
- Any Type of Finance Agreement
- Including Finance Lease and Contract Hire
Pays the difference between:
- The Insurance pay out and the Shortfall which the finance company will expect back to them.
- FULL term of the finance agreement or 60 months (whichever is less)
Return to Invoice Gap
For Cash Purchase
This pays the difference between the minimum Market Value your Motor Insurance Company will pay out at the point of a Total Loss/ Write Off and the Original Invoice Price you paid for the vehicle. This also means that should you have funded your vehicle through a Hire purchase agreement and paid a deposit, you will have the Shortfall covered and any deposit you paid (excluding VAT) to return the amount to the Invoice Price.
For 3rd Party Loan or Finance
It also covers you if you have a 3rd party finance agreement or loan which you have incurred interest on to fund the vehicle. It will not only pay the difference between the Minimum Market Value of the Vehicle and the Invoice Price plus any settlement / shortfall you have from a 3rd Party finance agreement or loan.
Pays the difference between:
- The Insurance pay out and the ORIGINAL INVOICE PRICE meaning if you have paid a high deposit and then financed the remaining you will not lose this.
- The shortfall from the ORIGINAL INVOICE and the FINANCE SHORTFALL if you have funded your vehicle with a 3rd Party e.g. bank, own finance company, loan etc...
- Any Type of Finance Agreement. Including Finance Lease and Contract Hire
Please contact Low Cost Vans for more information on GAP Insurance where we will be happy to answer any questions you have
(We are authorised and regulated by the Financial Services Authority (FSA) so it is our responsibility you ensure you are fully advised on GAP Insurance)