We have produced many articles on Contract Hire Gap Insurance in the past year or so. Contract Hire or lease agreements were the very forms of financial agreement that gap insurance was first developed for. Indeed, for many years the lease agreements featured contract hire gap insurance cover in the monthly rental paid on the agreement.
Why Contract Hire Gap Insurance?
Your lease agreement is different from many types of finance agreement you may find. This is because you can never own the vehicle with a contract hire or lease deal. This is in stark contrast to other forms of finance such as hire purchase, personal contract purchase or a motor loan. Because you may never own the vehicle, this means you cannot benefit from such gap insurance cover such as return to invoice or vehicle replacement insurance.
If your lease vehicle is written off during the period of the agreement, your leasing company will ask for two elements to be provided for:
The market value of the vehicle – which a good motor insurance policy will cover
a proportion of the outstanding rentals on the agreement
This second element is not provided for by your motor insurance policy, and is exactly what a good finance gap or contract hire gap insurance policy is designed to do.
Buy Contract Hire Gap Insurance
If you take out a contract hire gap insurance policy for your lease, then the policy is designed to cover those outstanding rental requirements on the agreement. This can mean you can pay off the agreement without having to dip into you own pockets.
Contract Hire Gap Insurance can be bought for anywhere from 1 to 5 years, and if you look to a specialist gap insurance provider, then you can find 3 year cover for less than £70 in the UK today. Get Contract Hire Gap Insurance to avoid a nasty surprise!