Vehicle Replacement Gap Insurance
Vehicle Replacement Gap Insurance ensures that if you are in the unfortunate position in which your car is written off or stolen, that you will not find yourself unable to purchase your car again if that is your wish. Cars Depreciate over time, it is a sad fact but a fact all the same, the average vehicle actually is likely to decrease in value by 50% within it’s first three years of ownership. Your motor insurer, unbeknownst to a lot of people, will only award you the sum of money to which your car has been valuated on the day it was written off or stolen, this could of course leave you with an extreme loss and without being in the position where you could buy your car again.
Vehicle Replacement Gap Insurance will reward the amount of money needed to be able to buy the same model of car that you drove away from the showroom in, same mileage, age etc. Cars usually increase in price and so you could find yourself needing, the remaining amount of money to take you back up to your original retail price and then the amount on top that your model of car has now risen to. This is where Vehicle Replacement comes in, the amount you will be awarded is the amount it would cost to buy the same standard of vehicle you drove away with, leaving you with the money to use in whichever way you see fit. It really would be an unfortunate set of circumstances if you were out of pocket, nevermind if you would like to buy your vehicle again, with Vehicle replacement Gap insurance you will not have this worry.
A vehicle replacement gap insurance example
For example if you bought a Ford Fiesta for £15,845, according to Whatcar.com’s depreciation calculator, within the first year this valuation could have dropped to
£10,025 due to depreciation. This means that if your car was written off or stolen in the first year of ownership, your motor insurance would only award you this amount and due to appreciation, the cost of the same standard of vehicle again is likely to be more. So you could find yourself over £5,000 out of pocket, with even more money to find if you wanted the same car again. If you were covered with Vehicle Replacement Gap Insurance, this would mean that the difference between what your motor insurance valued your vehicle as at the point of total loss and the amount to buy a new car, same age, standard, mileage etc, would be paid.
Don’t forget that if you can never own your vehicle then Contract Hire Gap Insurance is for you.