Buying your car outright can be a rather expensive process and so it is no surprise that a lot of people are deciding to lease or purchase their vehicles through contract hire or finance. This allows people to be able to acquire the vehicle they desire, without a very large amount of money being expected of them straight away. Hiring your Fiat monthly, for a fraction of it’s retail value, or paying your Fiat off at monthly intervals, allows buyers and leasers to be able to spread their finances effectively and is essentially a very convenient way of acquiring a vehicle.
If you happened to be the subject of vehicle theft and your car was declared a total loss, or if you were unfortunately involved in an accident and your car was declared a write off, there is a lot more to consider unfortunately, than just what you have been through. If you did acquire your Fiat through a contract hire or finance company, no matter what the circumstances are, the company will still expect the outstanding balance that is owed to them, to be taken care of.
So what would Contract Hire Gap Insurance for your Fiat do?
Not a lot of people realise that if you are involved in an accident or your car is stolen and is declared a total loss, your motor insurance will only pay the hire company, the amount your car was valuated on the day it was declared a write off. Due to car depreciation, it is almost a certainty that this amount is going to be a significant amount less than the car was originally worth, this could therefore essentially leave you thousands of pounds out of pocket and in debt to your hire company. Contract Hire Gap Insurance will then pay the difference between the motor insurance valuation that they have paid to the hire company and the remaining balance outstanding.
Lets look at an example of Contract Hire Gap Insurance for your Fiat?
Lets say that you acquired a Fiat Punto through finance or contract hire, that had an original valuation of £12,100, lets say that your car was stolen or you had an accident three years down the line, this would mean according to whatcar.com’s depreciation calculator your car would now be worth £4,700. This is the amount that would be paid to your hire company by your motor insurance, this of course will leave you with an amount still to pay to your hire company. Whatever this outstanding balance is, will then be topped up by Contract Hire Gap Insurance. This will take the strain off your shoulders and could potentially be the difference between thousands of pounds. Please don’t leave yourself exposed. Remember that if you can eventually own your vehicle and it is not just being hired, you may want to explore vehicle replacement gap insurance or return to invoice gap insurance for your Fiat.