Buying your car outright can be an expensive experience so there really is no shock that many more people are choosing to lease or purchase their vehicles through contract hire or finance. This essentially allows people to acquire the vehicle they desire, without the whole amount of money being expected to be paid straight away. Paying your Jaguar off at monthly intervals, or hiring your vehicle for a fraction of it’s retail value per month, allows buyers and leasers to be able to spread their finances in a way that is convenient.
If you were to find yourself the subject of car theft and your car is therefore declared a total loss or involved in an accident in which your car was written off, then there is unfortunately more for you to consider than the events you have already been through. If you did acquire your Jaguar through a finance or contract hire company, then regardless of the circumstances, the company will still expect to be paid with the outstanding balance that is owed.
So what would Contract Hire Gap Insurance for your Jaguar do?
Not many people appear to be aware of the fact that if you do find yourself the victim of vehicle theft or if you are involved in an accident where your car is declared a write off, then your motor insurance will only pay your hire company, the valuation of your car on the day it was declared a total loss. Due to depreciation then this amount is going to be a significant amount lower than what your car was originally worth, potentially leaving 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 valuation on the day) and the amount that remains outstanding to your hire company.
Lets look at an example of Contract Hire Gap Insurance for your Jaguar?
Lets say that you acquired a Jaguar XF Saloon, that had an original valuation of £32,940, lets say that you are unfortunately involved in an accident two years later, according to whatcar.com’s depreciation calculator, your car would now have a valuation of £18,683, which is a rather significant amount less. This is the amount that would be paid to your finance or contract hire company by your motor insurer. This will of course leave you with an outstanding balance that is owed to your hire company. Whatever this outstanding amount is, will then be topped up by your Contract Hire Gap Insurance. This could be the difference between thousands of pounds. Please do not leave yourself exposed. Remember that if you can eventually own your vehicle and it is not just being hired, then you could also explore Vehicle Replacement Gap Insurance and Return to Invoice Gap Insurance. More on Contract Hire Gap Insurance?