Buying a car outright can be an expensive experience, so it is no shock that many people are deciding to lease or purchase their vehicles through contract hire or finance. This allows people to still be able to acquire their ideal vehicle, without the whole amount of money being demanded at once. Hiring your Citroen monthly, for a fraction of the retail value, or paying the car off at monthly intervals, allows a buyer or leaser to spread their finances and is seen as a really convenient way of doing things.
If you were unfortunately involved in an accident in which your car was written off, or if your vehicle was stolen and declared a total loss, there is even more to consider than just the trauma of what you have been through. If you acquired your citroen through a contract hire or finance company, regardless of the circumstances, the company will still expect the outstanding balance to be covered.
So what would Contract Hire Gap Insurance for your Citroen do?
Not many people are aware of the fact that if you are involved in an accident or your car is stolen and then declared a total loss, your motor insurance will only pay the hire company, the amount the car was valuated on the day it was declared a total loss. Due to depreciation, this amount is almost certainly going to be a significant amount less than the car was originally worth, this could essentially leave you thousands of pounds out of pocket and in debt to your hire company. Contract Hire Gap Insurance will pay the difference between the motor insurance valuation, that has been paid to the hire company and the remaining outstanding balance.
Lets look at an example of Contract Hire Gap Insurance for your Citroen?
If you acquired a Citroen C3 Picasso MPV through finance or contract hire, that was originally worth £14,660, according to whatcar.com’s depreciation calculator, within three years, the value of the vehicle could have dropped to £5,720. The latter is the amount that would be awarded to your hire company by your motor insurer, if your car was declared a write off after three years. Now, whatever the outstanding balance is that is owed to your hire company, is expected to be paid by you. Contract Hire Gap Insurance would top up this amount, to equal the amount that is still owed to your hire company. This leaves you to get on with more important things like getting better after your accident, or looking around for a new car. Contract Hire Gap Insurance will take the strain off your shoulders, if you are left exposed, it really could be the difference between thousands of pounds. Don’t forget if you can eventually own your vehicle and it is not just being hired, you may want to explore, Return to Invoice Gap Insurance or Vehicle Replacement Gap Insurance.