Despite every effort to take good care of your car, its value begins to depreciate from the moment you first drive it away.
If you’re unfortunate enough to experience a total loss of your car, you could find that you’re out of pocket by quite some distance once you receive your insurance settlement.
Fortunately, there are some options available to help protect you from any financial shock.
Guaranteed Asset Protection, better known as GAP, insurance covers the ‘gap’ between the amount you still owe on finance, and the amount your insurance company will pay if your car is stolen or written off.
- What is GAP insurance and should you have it?
- GAP insurance terminology
- The UK’s best GAP insurance providers
The benefits of GAP insurance
Finance safety net
If you’ve taken out a Tesla lease and it gets stolen six months later, you’ll still be liable to pay off the finance left on your agreement, leaving you with a hefty bill.
If you have GAP insurance, you wouldn’t find yourself paying off the amount left on a finance agreement on a car that you no longer own.
Even if you decide to take on a car lease, a brand-new car is a big commitment and expense. Due to depreciation, the value of your car and thus investment will go down rapidly.
GAP insurance ensures that you receive the original value that you paid for the car and not just the market value at the time the car is declared a total loss. This would be especially important if a Mercedes EQC lease is on your radar, with substantial monthly payments.
Brand new replacement car
Depending on the type of GAP insurance you go for, you could be left in a position to both clear any outstanding finance and have money left over to take out a new lease agreement, rather than having to downgrade due to depreciation.
Although, some motor insurance providers will supply you with a new car if yours is written off or stolen within the first 12 months of ownership, so you must check and read the fine print of your policy.
Carparison’s best car lease deals can suit your every need. Contact their leasing specialists at www.carparisonleasing.co.uk for more information.