We all know that buying a car outright can be an expensive process, so there is no real surprise that a lot of people are deciding to purchase or lease their vehicles through finance or contract hire. This allows people to be able to acquire their desired vehicle, without a huge amount of money being expected of them straight away. Paying your Ford off at monthly intervals or hiring your Ford for a fraction of it’s retail value, allows buyers and leasers to be able to spread their finances in a way that is convenient to them.
If you found yourself the subject of car theft where your car was declared a total loss, or if unfortunately you were involved in an accident in which your car was declared a write off, then there is a lot more for you to consider than what you have already been through. If you did acquire your Ford through a finance or contract hire company, then regardless of the circumstances, the hire company will still expect you to produce the outstanding balance that is owed to them.
So what would Contract Hire Gap Insurance for your Ford do?
Not many people are aware of the fact that if you do find yourself the subject of vehicle theft or you are involved in an accident and your car is declared a total loss, your motor insurer will only pay the hire company, the valuation of your car on the day it was declared a write off. Due to depreciation, this is going to be a significant amount less than the car was originally worth, potentially leaving 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.
Lets look at an example of Contract Hire Gap Insurance for your Ford?
Lets say you acquired a Ford KA on finance or contract hire that had an original retail value of £9,725, lets say three years later your car was declared a total loss due to an accident or theft, this would mean that according to whatcar.com’s depreciation calculator, that your car would now be worth £4,101, less than half it’s original value. This is the amount that would be paid to your hire company by your motor insurer, which will of course 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 and it is not just being hired, you can explore Vehicle Replacement Gap Insurance or Return to Invoice Gap Insurance for your Ford. Find out more about Contract Hire Gap Insurance?