If you are looking at buying a Mini and are thinking about Gap Insurance, what choices do you have in the levels of cover available? If your motor dealer speaks to you about Gap Insurance for your Mini, then they may only offer you one or two choices in terms of cover. In reality, if you are looking to protect your new vehicle, there could be a large range of cover available to you.
Gap Insurance for Mini
The types of Gap Insurance cover available to you depend on several factors, the most important of which is how you have bought the vehicle.
If you secure your Mini by way of a Contract Hire lease, then this form of finance is unique in the fact that you can never own the vehicle at any point. This means that protecting the invoice price or the replacement cost are not really relevant, as it is not your vehicle top replace. However, if the Mini is written off, your leasing company will seek the ‘market value’ of the vehicle at the time, this can be covered by your motor insurance policy. The other aspect that your leasing company will look for is a proportion of the outstanding rentals on the agreement.
This requirement can be covered by a Contract Hire Gap Insurance policy for your Mini.
If you have a finance agreement on the car, and you simply wish to protect any potential shortfall between the vehicle value and the outstanding finance agreement, then a Finance Gap Insurance product could be worth a look. If you have only put a small deposit into the finance then you could be in a situation where the settlement form the finance company is higher than the value of the Mini when it is ‘written off’. A Finance Gap Insurance policy can protect this amount.
If you have paid cash, or have a finance agreement with a deposit you have paid, then the option of Return to Invoice Gap Insurance may be worth considering for your vehicle. By protecting with an RTI Gap Insurance, you can cover between the vehicle market value and the original invoice price you paid. Even if you have a finance agreement, this can be settled and whatever remains is your ‘equity’ to use as a deposit on the next vehicle.
One final option is to protect the cost of replacing the vehicle. If you buy say a brand new Mini for £18,000 today, and the equivalent brand new model in 2014 is £21,000, then even a return to invoice policy will leave you £3,000 short of replacing the vehicle. By looking at a Vehicle Replacement Insurance, you can protect between the vehicle market value and the cost of the equivalent model. Thus you take care of not just the depreciation on your Mini, but the increased cost in having to replace it.
Which Mini Gap Insurance?
Well you could opt for the Gap Insurance offered by your Mini dealer. This is likely to be return to Invoice, and can tend to be quite expensive when compared to online specialist brokers. If you take a look online, you could find any number of Gap Insurance policies for your car, at far lower premium prices than the dealer.
Ultimately, which type of Gap Insurance you choose for your vehicle is up to you. However, with such a choice in Mini Gap Insurance you need to make your decision carefully!