Are you waiting on a new car purchase? Or perhaps thinking about grabbing yourself a shiny new 22 plate? Make sure that you’re taking every step to protect your investment.
It’s a given that no matter the make and model of a new car, it’ll begin to depreciate as soon as it’s purchased and driven away from a dealership.
With the average depreciation rate of a new being around 15-35% within the first 12 months, and continuing to rise by up to 50% over three years, it’s essential to protect your purchase by having the right insurance products in place1.
This is where Guaranteed Asset Protection (GAP) insurance comes in.
What does it cover?
If the worst should happen and your vehicle is written off or stolen, there will likely be a ‘gap’ between the amount you paid and the amount your insurer will actually pay you. As well as this, there may be a significant difference between the value of your vehicle and that of the replacement car you’re provided with.
But don’t worry, you can protect yourself against this with GAP insurance – this covers the difference between your initial investment in the vehicle, or the amount that you owe if you have finance and the pay out your insurance provider will offer.
What type of GAP insurance is appropriate for me?
There are three main types of GAP insurance - each covers something different and may be appropriate for different policyholders depending on a number of factors:
- ‘Back to Invoice’ – compensates the policyholder on the amount that was paid for the vehicle or the amount that is owed to a motor finance company.
- ‘Vehicle Replacement’– ideal for those who purchased their car at a discount, this covers the policyholder if it costs more to replace the vehicle than it would have done at the time of purchase.
- ‘Vehicle Finance’– only available for those who purchased a vehicle on finance, this product will clear the finance remaining on a vehicle so the policyholder doesn’t need to worry about paying off any debt, but often doesn’t leave any money left over to help with a new car purchase.
How we can help
As the benefits of each of these types of GAP Insurance varies, so does the price. Your garage may offer GAP insurance when purchasing your vehicle, but you can’t guarantee that they’re giving you a fair and flexible policy.
Our experts are here to work with you to find the best insurance products to protect both you and your assets. So, make sure to contact the Sutton Winson team on 0800 980 2701 for a comparison of prices and benefits before you make any decisions.
1Source: Motorway - Car Depreciation | https://bit.ly/3udReE1