Hi all,
I've recently bought a new car worth about £21k on Hire purchase over 5 years, with no baloon at the end.
I'd like to obtain GAP insurance on the car, but am a bit confused about which the best option would be for me.
Which of the following would be best in terms of cover?
Finance GAP insurance
Back to invoice GAP insurance
Replacement car GAP insurance.
Also, what value of cover would people suggest i take out? £5k? £10k?
Thanks for any help offered!
Made vehicle non-specific
Edited by Pugugly on 07/01/2009 at 21:35
|
What was your deposit?
How much is the total finance charge over 5 yrs?
|
Hi,
deposit of £1k, and total finance charges about £5k
thanks..
|
Putting down only £1000 I seriously question the purchase of a £20K+ car.
Might have been more judicious to buy a £7-8K car and change every 2/3 years IMO
|
thanks for that opinion. I've got my own reasons as to buying the car I did.
i just need info in regards to the GAP question....cheers.
|
Depends what pay out you want if the car is written off.
Do you just want to be able to pay off the finance or do you want to be able to go out and buy another car at the invoice value?
You may need two policies (if permitted) to do both!
|
ideally I'd like to pay the car off and then have a bit of extra money to put down as a deposit on another car..... how would i do this using just one policy?
|
|
|
Back to invoice I rekon.
Level of cover is back to what you paid for it less whatever the insurance payout is.
GAP wont payout if the insurance dont payout.
I know of someone who torched their own car to claim on a GAP and insurance but insurance company kicked claim out as fraud and gap refused to pay up too ( he made a very basic mistake)............... Not saying for 1 second you are planning same lol
Dealer possibly charge you £400 ish but better deals on the net have seen it as low as £150 but never went into small print.
|
"ideally I'd like to pay the car off and then have a bit of extra money to put down as a deposit on another car"
You won't be able to make a profit on a claim, though. The best you can expect is to be put back where you started, which in your case should include your £1,000 deposit.
|
Thanks for your reply guys...from my understanding, on a 'return to invoice' policy, the below could happen (assuming car stolen/ written off at end of year 2 for example):
Car purchased for £20,000.00
Amount due to Finance company when written off £14,000.00
Insurance company offer: £10,000.00
Return to Invoice cover pays (£20k-10k): £10,000.00
result:
use 4k to pay off finance company
use remaining 6k as deposit on new car.
is my thinking correct?
|
can anyone confirm my thoughts are right or wrong?
|
Make sure the policy covers you for the whole term,GAP typically does,VRI,vehicle replacement insurance typically is for 3 years.
|
I took out GAP insurance on a 25k car & 18 months later it was written off in a serious RTA. Im glad I had GAP for the full purchase price. Took a few months & had to provide proof of car & condition pre-accident & all service history etc & plenty of interigation but they paid up the 9k short fall when my insurance company paid 16k.
I have to say it was the best £500 I ever spent on insurance. Enabled me to buy a brand new replacement without being out of pocket.
|
|
|
Car purchased for £20 000.00 Amount due to Finance company when written off £14 000.00 Insurance company offer: £10 000.00 Return to Invoice cover pays (£20k-10k): £10 000.00 result: use 4k to pay off finance company use remaining 6k as deposit on new car. is my thinking correct?
Yep, as long as the policy is return to invoice - if you are buying the car on dealer finance then they will try and sell you the other one whose name escapes me. That will only cover any shortfal between outstanding finance and insurance, so in your example above they would pay out 4K to clear the finance and you would be left debt free, but with no deposit for another car.
Shop around thoughas GAP from a dealer is usually overpriced and can be bought on the net much cheaper even though dealers will tell you you cant.
|
thanks for all your help people....i will start shopping around for the best deal i can get!
|
Car purchased at 21k
Outstanding finance 14k
Car written off and market value payout is 10k.
Return to Invoice will pay £21k-£10k = £11k. You have £10k + £11k = £21k of which you pay £14k to finance co leaving £7k to do with as you wish (deposit on next car).
Cover to clear finance will pay £14k-£10k=£4k, You pay all £4k plus the £10k market value payout to finance company to clear the loan. You have nothing for deposit on next car.
RTI for a 21k car should cost you £200ish for 3 years cover. Make sure you keep the ORIGINAL invoice - you need it if you ever make a claim. Don't take tooo long - they only give you a few weeks from car purchase to buy the cover.
Don't use an insurer with the welsh capital in its name.
|
thanks for that......nice and easy to understand....I'm off to look
|
|
|
|