It can be very expensive to buy a car outright, so it is no surprise that many people are now looking to acquire their vehicles on contract hire or finance. This can allow someone to have a grasp of their dream car, hiring it or paying it off at monthly intervals, this essentially allows you to spread out your finances in a way that is convenient to you.If you are in possession of an amazing vehicle like a BMW, then it is natural to want to protect your car. It is not unusual that your car becomes like a member of your family and with an outstanding vehicle like a BMW, you are more than likely to form an attachment to it. It is a very sad fact that a car with such wonderful attributes does attract the wrong kind of attention and is likely to be a prime target for car thieves. If you did wake up one day to realise that your BMW had been stolen from your driveway, aswell as being very distressed at being the subject of auto theft and the fact that your car is missing, there are unfortunately even more factors to begin considering. This is where Contract Hire Gap Insurance could be the helping hand you need.
So what would Contract Hire Gap Insurance for your BMW do?
Regardless of the circumstances, whether you were involved in an accident in which your car was declared a total loss, or your vehicle was stolen, your contract hire company will still expert the outstanding balance that is owed to them to be paid. Now, unbeknownst to some people, your motor insurance, will only award your contract hire company with the amount that your BMW was valuated on the day it was declared a total loss. Due to depreciation, this is likely to be a significant amount less than the amount the car was originally worth. The average car depreciates by up to 50% within it’s first three years. This could leave you looking to pay a significant amount of outstanding hire payments yourself . Contract Hire Gap Insurance will pay the difference between the amount that your motor insurance has valued your car at and paid your contract hire company and the amount that is still required on top, to pay the outstanding balance to your contract hire company.
Lets look at an example of Contract Hire Gap Insurance for your BMW:
If you had acquired a BMW 1 Series hatchback for £19,145, according to whatcar.com’s depreciation calculator, on average, within three years, the car could have depreciated to £9,465. The latter is therefore the amount that would be offered by your motor insurance, to your contract hire company, in event of your car being declared a write off. This means that, even though three years worth of monthly payments have been paid to your contract hire company, there is still likely to be a significant sum of money owed to them, that you would have to find on your own. This is where contract hire gap insurance comes in, this type of gap insurance would top up the motor insurance valuation of £9,465 and the amount that is still owed to the contract hire company. This leaves you able to focus on the more important things, like looking around for a new vehicle, or gaining your confidence back after an accident. Don’t leave yourself exposed, you could find yourself thousands of pounds out of pocket. Protect yourself with contract hire gap insurance.