Confused by Car Gap Insurance? You may think that there are only a couple of types guaranteed asset protection for your car, but you would be very wrong. There may be a dozen or so different types of car gap insurance available in the UK today. In this article we will take you through a range that may be for you.
Which Car Gap Insurance?
Lets start at the beginning. The very first type of car gap insurance to be developed was for lease vehicles. Today, Contract Hire Gap Insurance is still going strong. This type of cover protects a lease or contract hire agreement, in that if the vehicle is written off, the user may face a bill for the outstanding rentals on any lease agreement. Contract Hire Gap Insurance is designed to meet that shortfall.
Very similar to Contract Hire Car Gap Insurance is Finance Gap Insurance. This form of Gap cover is designed to cover any shortfall on a standard finance agreement, such as hire purchase or personal contract purchase. Finance Gap Insurance simply covers this to enable you to pay off your finance agreement.
The next on our list will be Return to Invoice car gap insurance. This common type of gap protection covers the policy holder back to the original invoice price they paid for the vehicle. This can be suitable for cash or finance purchases, as you can protect your investment and any deposit you have placed on the agreement.
The newest form of car gap insurance is Vehicle Replacement Insurance, or VRI Gap Insurance. This type of car gap insurance can protect you to the replacement cost of the vehicle. This means if the equivalent vehicle to the one you bought the policy for is now higher than you originally paid, a VRI Gap policy can cover to this amount.
All the policies above usually must be bought for you vehicle within a specific time period after you have bought the vehicle, usually 180 days. What happens if you have owned the vehicle for longer than that?
There is a type of Car Gap Insurance that will cover you to the value of the vehicle on the day you buy the policy. Typically this is called Agreed Value Gap Insurance or Shortfall Insurance. The value protected can differ from policy to policy, but usually it is based on Glass’ Guide or Parkers Guide.
What type of Car Gap Insurance?
With such a choice there should be a type ideal for your needs. Most cars can be covered, although you may struggle to find cover for more exotic types. However, choice is varied, and you can even find car gap insurance for taxi’s and driving school vehicles.
The choice is yours, but if you are looking to buy gap insurance then the choice has never been greater. We hope you have found our rundown on car gap insurance helpful and enlightening.