Having your car stolen or damaged beyond economical repair is a serious enough loss without having to consider whether you will be substantially out of pocket after the insurers have closed the claim. Often your insurers will only pay for the value of your vehicle at the time of the incident meaning car owners can be left with a shortfall of often thousands of pounds from the amount they originally paid.
New research carried out by uSwitch shows that there is often a 35% difference between the price paid for the car and the market value after 3 years, a gap which the policyholder would have to bear. When 86% of motorists use a loan or credit agreement to buy a car this shortfall would be due to a the funding company and then go onto effect your ability to secure credit if you are unable to repay it within the agreed time period.
However there is help at hand!
GAP Insurance or to give it its full name Guaranteed Asset Protection Insurance will provide financial cover to protect this difference between the amount you pay for the car and the amount your car insurers are willing to pay in the event of a claim. This is especially beneficial for those customers with a new car or with a credit or finance agreement in place.
However, according to this recent study only 4 out of 10 of us are even aware of the cover and only 1 in 10 motorists actually purchase this protection.
Perhaps it has developed a poor reputation as an add-on thrust upon car buyers when they first buy the car along with alloy wheel protection and a leather ointment for the car interior. It can also be offered at unnecessarily high premiums with high markups for the car salesperson. But GAP cover should be considered a valuable purchase and need not be expensive if purchased from an insurance broker such as ourselves.
At Sharrocks we can offer GAP cover for a 3 year period on most vehicles for less than £200 with a specialist insurer and you do not need to be an existing motor insurance customer of ours.
As a brand new set of registration plates are launched this month and more new cars a sold consider GAP cover alongside your motor insurance policy.