Buying a car outright can be an expensive experience and so there is no surprise that more and more people are deciding to lease or purchase their vehicles through contract hire or finance. This allows people to acquire their desired vehicle, without the whole amount of money being expected of them straight away. Paying your Hyundai off at monthly intervals, or hiring the vehicle for a fraction of it’s retail value per month, allows leasers and buyers to be able to spread their finances in an effective way.
If you were to find yourself unfortunately involved in an accident where your car was written off, or you were the subject of vehicle theft and your car was declared a total loss, then there is unfortunately more for you to consider than what you have already been through. If you did acquire your Hyundai through a finance or contract hire company, then regardless of the circumstances, the company will still expect to be paid the outstanding balance that you owe to them.
So what would Contract Hire Gap Insurance for your Hyundai do?
Not many people are aware of the fact that if you are the victim of vehicle theft or are involved in an accident and your car is declared a write off, then your motor insurance would only pay your hire company, the valuation of your car on the day it was declared a total loss. Due to depreciation, this will be a rather significant amount lower than your car was worth originally, this could potentially leave you thousands of pounds out of pocket and owing to your hire company. Contract Hire Gap Insurance would then pay the difference between the amount that your motor insurance has paid your hire company (the amount of your car valuation on the day) and the amount that remains outstanding.
Lets look at an example of Contract Hire Gap Insurance for your Hyundai?
Lets say you acquired a Hyundai i20 that had an original valuation of £10,945, lets say that you have an accident two years into your lease/hire, according to whatcar.com’s depreciation calculator, your car would now be worth £5,650, a significant amount less. This amount would be the amount paid to your finance or contract hire company by your motor insurer. This will of course leave you with an outstanding amount still to pay. Whatever this outstanding amount is, will then be topped up by your Contract Hire Gap Insurance . This could essentially 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 can explore Vehicle Replacement Gap Insurance or Return to Invoice Gap Insurance. More on Contract Hire Gap Insurance?