Changing your car? Read this…
29th August 2017

With the launch of the new registration plate, September is one of the busiest months of the year for the UK motor industry.

September 2016, according to the Society of Motor Manufacturers and Traders (SMMT) saw 469,696 new cars registered – a rise of 1.6% and the highest September on record.

Fleet registrations continued to grow, up 7.3% and there was increased demand for diesels and alternatively fuelled vehicles, up 2.8% and 32.6% respectively. Similar numbers are expected this year with around 80% of new cars being purchased on finance.

Do I need GAP insurance?

  • If you owe more than your car is worth, you risk being in negative equity. This is when GAP protection could be useful, for example if the down payment for your finance deal was small, if you’re paying a lot of interest or if you are paying the debt off over a longer period.
  • Similarly, if you’ve signed up for a long-term contract hire arrangement, loss of the car might mean you end up owing the company more than your insurance provider will pay out.
  • If you are concerned that you wouldn’t be able to afford to replace your car on a new-for-old basis, GAP protection could also be helpful.

Run your own business?

If your business runs a vehicle such as a van, light commercial vehicle or pickup truck, you may want to consider a Commercial GAP policy. Return to Invoice GAP would pay the difference between your comprehensive commercial vehicle insurance settlement and the original invoice price of your vehicle, whereas Vehicle Replacement GAP will pay the difference between your lost motor and the cost of a replacement vehicle, usually matching the original at the time of purchase.

Watch out for exclusions

Whether for personal or business use...

  • Remember you need to have fully comprehensive insurance in place to claim on GAP insurance.
  • GAP insurance won’t cover any amount deducted by your main car insurance company, for example reduced payouts due to unpaid premiums, salvage value or contributory negligence.
  • Generally it will only cover excesses up to £250 of your claim, although additional covers can be purchased for higher amounts.
  • Non-standard extras added by the owner, such as speakers or a sat-nav, won’t be covered.
  • GAP insurance won’t pay out until your claim is successful and settled, so bear in mind that any outstanding finance payments must be managed on your own until then.

At EIC Insurance we offer a wide range of annual and multi-year GAP Insurance solutions for consumers and businesses covering cars, vans, mini buses, trucks and agricultural vehicles. If you would like a quotation for this please contact the office on 01442 286910 or email us and we will be glad to assist

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