So what is deferred Gap Insurance exactly? We have mentioned this topic before, and it simply depends on your own motor insurance as to whether it is an option for you.
If your own motor insurance provides you with a replacement vehicle if your vehicle is written off in the first 12 months, then you may want to ‘defer’ the start date of your Gap policy. Why? because in reality you may have ‘double cover’ for that first 12 month period. Where is the sense in wasting money?
A case for Deferred Gap Insurance
If you buy a new vehicle, and insure it through a company like Saga or Liverpool Victoria, then you may well have a motor insurance policy that provides you with a replacement vehicle in the first 12 months.
If this is the case, then any Gap Insurance policy you have running alongside this cover may well be useless at this time. If the vehicle is written off, and your own motor insurance replace the vehicle, then you have no need for the Gap Insurance at this point. This is where a deferred gap insurance policy may be appropriate.
If you wanted 4 years cover in total, for example, you could buy a 3 year gap insurance policy and defer it for 12 months. This means that the cover for you deferred gap insurance policy would only ‘kick in’ when your own motor insurance replacement cover expires. This also means that you are not paying for ‘double cover’ in that first 12 month period.
Where to find deferred Gap Insurance
This can be a little tricky, as some online gap insurance brokers. with limited range of product features, do not offer deferred gap insurance at all. However, if you have a shop around then you will find a few that do.
The brokers offering policies underwritten by specialist insurers do try to offer policies that are a little more ‘out of the box’. Some offer a specialist deferred gap insurance, usually in a return to invoice style.
Others offer a full range of deferred gap insurance policies. So if you do have ‘replacement’ cover, then you can get finance, return to invoice and vehicle replacement gap insurance that can be deferred.
In fact if you look closely enough, you can find one broker who will allow you to take a 4 year policy, and defer it for 12 months, giving you 5 year cover in total. One other benefit is that the deferred option if free, so 5 year cover for the price of 4!
You should always check the terms and conditions of your own motor insurance policy, with regards to the ‘replacement’ feature. If your own insurance does not replace the vehicle for any reason, then the ‘deferred’ gap insurance cannot help you in those first 12 months.
So if you do get replacement cover in that first 12 month period, then take a look at deferred gap insurance to save you a bundle!