We are all aware that the process of buying a car outright can be a very expensive one and so there is no real surprise that many people are deciding to purchase or lease their vehicles through finance or contract hire. This allows people to acquire the vehicle they desire, without the whole amount of money being expected of them straight away. Paying your Honda off at monthly intervals, or hiring for a fraction of it’s retail value monthly, allows buyers and leasers to be able to spread their finances in a way that they find convenient.
If you were to find yourself the subject of auto theft and your car was declared a total loss, or if you were unfortunately involved in an accident in which your car was declared a write off, there is rather a lot more for you to consider, than what you have already been through. If you did acquire your Honda through a finance or contract hire company, then regardless of what the circumstances are, your hire company will still expect you to pay the outstanding balance that is owed to them.
So what would Contract Hire Gap Insurance for your Honda do?
Not many people are aware that if you are the subject of vehicle theft or if you were involved in an accident in which your car was declared a total loss, then your motor insurance would only pay your hire company, the valuation of your car on the day it was declared a write off. Due to depreciation, this will be a significant amount lower than the car was originally worth, this could potentially 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 valuation that has been paid by your motor insurance and the balance that remains outstanding to your hire company.
Lets look at an example of Contract Hire Gap Insurance for your Honda?
Lets say you acquired a Honda Jazz with an original retail value of £11,605, lets say that unfortunately you are involved in an accident and your car is declared a total loss two years into your lease, according to whatcarcom’s depreciation calculator, your car would now be worth £6,165, this is therefore the amount that would be paid to your hire company, by your motor insurer. This of course will leave you with an outstanding amount that is still owed to your hire company. Whatever this outstanding balance is, will then be topped up by Contract Hire Gap Insurance. This could literally be the difference between thousands of pounds. Please don’t leave yourself exposed. Remember that if you can eventually own your vehicle then and it is not just being hired, you can explore Return to Invoice Gap Insurance or Vehicle Replacement Gap Insurance for your Honda. More on Contract Hire Gap Insurance?