Vehicle Replacement Insurance, or VRI Gap Insurance for short. This is not one of the traditional gap insurance covers offered by the dealers in the UK, where finance gap insurance and RTI gap insurance are still the norm. As gap insurance has developed over the years, it has been recognised that return to invoice could protect your investment, but helping you back to the original price you pay.
Simply, the cost of new cars generally rise over time. New models, manufacturers production costs and VAT increases have all effected the cost of new cars over a period. A new car in 2007, bought for £10,000, is unlikely to be replaced on a ‘like for like’ basis in 2011 for the same price.
Also, when you purchase a new vehicle at your own leisure, you may do so to take advantage of a manufacturers offer, or a ‘pre reg’ or ‘demo’ vehicle at a price far less than normal. Having to replace a ‘written off’ vehicle normally normally means you do not have the luxury of time to choose your deal, and heavy discount smay not be available.
Under such circumstances, a ‘return to invoice’ style cover could fall woefully short of giving you enough funds for an equivalent vehicle. This is where VRI Gap Insurance steps in, but providing enough financial cover, back to the cost of an equivalent vehicle, on a ‘like for like’ basis.
Be aware that some ‘VRI Gap Insurance’ may only provide you with the original invoice price, not the cost of the equivalent vehicle. This way, you can replace with any vehicle you like, giving you far more choice.
As you can actually be returned to a value higher than you originally paid, VRI Gap Insurance can be regarded as the top level of gap insurance available, and therefore the premium cost can reflect this. However, for the reasons outlined above, for purchasers of new and nearly new vehicles, it could represent the best overall choice of gap insurance.
VRI Gap Insurance is now possibly the most popular choice for new and nearly new vehicle purchases. VRI Gap Insurance is widely available from a range of online brokers.
Hope you enjoyed our brief introduction into VRI Gap Insurance!