Vehicle Replacement Insurance, or VRI Gap Insurance is one of the most popular forms of Gap Insurance available in the UK today. The basis behind any type of Gap Insurance is that all vehicles will lose value over time, how quickly or slowly no one can say. What is also true is that the cost of replacing the vehicle is also likley to rise.
So, in protecting both the depreciation of your current vehicle, AND the inflationary costs of replacing it, VRI Gap Insurance can provide this ultimate level of cover. How does Vehicle Replacement Insurance work?
So in opting for Vehicle Replacement Insurance, you can protect both the loss in value in your old vehicle, and the extra cost you will need to replace it. So protection at both ends with VRI Gap Insurance!
Monday 26 September 2011
Thursday 22 September 2011
What is Gap Insurance?
If you are buying a vehicle in the UK it is likely that your dealer will have tried to sell Gap Insurance to you. Gap Insurance is an additional insurance that provides you with financial protection should your vehicle be written off.
How does it do this?
Well it can do this in one of several ways, but the basis of each is simply that your vehicle will lose value in the time that you own it. Should it be written off in an accident, or stolen, you are therefore likely to get far less in an insurance settlement than you originally paid, or would need to settle any finance, or even what it would cost to replace the vehicle.
There are several different types of Gap Insurance available in the UK today, each can provide slightly different levels of protection.
But firstly, lets look at why you may want gap insurance, take a look at this video:
So as you can see, Gap Insurance can be a great way to protect your finances, should the worst happen. But what differnet types are available, and how can they protect you?
Lets start with the most simple form:
Finance Gap Insurance - this will cover the difference between the vehicle market value, and the amount you need to pay off the finance settlement. So you can pay off the loan, and have nothing further to pay.
Take a look at this information video
Finance Gap Insurance is the oldest form of Gap Insurace, originally used in the USA to cover lease agreements. That brings us on to a specialist form of Finance Gap Insurance:
Contract Hire Gap Insurance - designed to cover the difference between the vehicle market value, and the amount required to settle the lease agreement, or the 'outstanding rentals' if you like. Contract Hire vehicles are an attractive, cost effective way of running a vehicle. A simple monthly 'rental' and then handing the vehicle back at the end of the agreement. However, if the vehicle is written off during the lease period, the 'hirer' can be left with a nasty bill! Take a look at this video:
There is one final form of finance gap insurance, and this provides the same protection as standard finance gap, but also includes cover for 'negative equity' from a previous finance agreement. So if you owed more on the finance settlement than your old car was worth, this 'negative equity' could have been refinanced on your new vehicle. If this was the case, you cannot cover the 'negative equity' amount under a standard finance gap policy. You would need a specialist 'Neagtive Equity Finance Gap Policy' to cover this additional amount. Take a look:
But what if you have paid cash, or have put a sizeable deposit into your new car purchase? Can you protect this with finance gap insurance? No, not at all, but help is at hand!
Return to Invoice or RTI Gap Insurance - is designed to cover between the vehicle market value, and the original invoice price you paid. So by doing this, you can get all your purchase price back, if you paid cash, or pay off the finance and whatever is left is your deposit for your new vehicle. Once again, take a look:
There is one final consideration. If you buy a vehicle today, and it is written off in the future, and the cost to replace that vehicle with an equivalent model rises, then can RTI Gap Insurance help you? Return to Invoice will only get you the original price you paid, so any increase in costs cannot be met by RTI Gap Insurance, however the 'new kid on the block' in the Gap Insurance world may be able to help!
VRI Gap Insurance or Vehicle Replacement Insurance - this type of gap insurance covers you for both the depreciation of your old vehicle, but also the inflationary costs of replacing it. How? because it will cover between the vehicle market value, and the cost of replacing the vehicle on a like for like' basis with a vehicle equivalent to the one you bought the policy for. So if you bought a brand new Mini Cooper S in 2011, you will get the cost of replacing the vehicle in the future, even if this cost is above the original price you paid. Take a look!
So there you have it, a quick run down of the differnet types of Gap Insurance available in the UK today. These types of cover are not retricted to cars either, with motorbikes, motorhomes, taxi's and vans also able to be covered. Ther are plenty more resources for gap insurance help on the web.
Hope you enjoyed our brief introduction into Gap Insurance!
How does it do this?
Well it can do this in one of several ways, but the basis of each is simply that your vehicle will lose value in the time that you own it. Should it be written off in an accident, or stolen, you are therefore likely to get far less in an insurance settlement than you originally paid, or would need to settle any finance, or even what it would cost to replace the vehicle.
There are several different types of Gap Insurance available in the UK today, each can provide slightly different levels of protection.
But firstly, lets look at why you may want gap insurance, take a look at this video:
So as you can see, Gap Insurance can be a great way to protect your finances, should the worst happen. But what differnet types are available, and how can they protect you?
Lets start with the most simple form:
Finance Gap Insurance - this will cover the difference between the vehicle market value, and the amount you need to pay off the finance settlement. So you can pay off the loan, and have nothing further to pay.
Take a look at this information video
Finance Gap Insurance is the oldest form of Gap Insurace, originally used in the USA to cover lease agreements. That brings us on to a specialist form of Finance Gap Insurance:
Contract Hire Gap Insurance - designed to cover the difference between the vehicle market value, and the amount required to settle the lease agreement, or the 'outstanding rentals' if you like. Contract Hire vehicles are an attractive, cost effective way of running a vehicle. A simple monthly 'rental' and then handing the vehicle back at the end of the agreement. However, if the vehicle is written off during the lease period, the 'hirer' can be left with a nasty bill! Take a look at this video:
There is one final form of finance gap insurance, and this provides the same protection as standard finance gap, but also includes cover for 'negative equity' from a previous finance agreement. So if you owed more on the finance settlement than your old car was worth, this 'negative equity' could have been refinanced on your new vehicle. If this was the case, you cannot cover the 'negative equity' amount under a standard finance gap policy. You would need a specialist 'Neagtive Equity Finance Gap Policy' to cover this additional amount. Take a look:
But what if you have paid cash, or have put a sizeable deposit into your new car purchase? Can you protect this with finance gap insurance? No, not at all, but help is at hand!
Return to Invoice or RTI Gap Insurance - is designed to cover between the vehicle market value, and the original invoice price you paid. So by doing this, you can get all your purchase price back, if you paid cash, or pay off the finance and whatever is left is your deposit for your new vehicle. Once again, take a look:
There is one final consideration. If you buy a vehicle today, and it is written off in the future, and the cost to replace that vehicle with an equivalent model rises, then can RTI Gap Insurance help you? Return to Invoice will only get you the original price you paid, so any increase in costs cannot be met by RTI Gap Insurance, however the 'new kid on the block' in the Gap Insurance world may be able to help!
VRI Gap Insurance or Vehicle Replacement Insurance - this type of gap insurance covers you for both the depreciation of your old vehicle, but also the inflationary costs of replacing it. How? because it will cover between the vehicle market value, and the cost of replacing the vehicle on a like for like' basis with a vehicle equivalent to the one you bought the policy for. So if you bought a brand new Mini Cooper S in 2011, you will get the cost of replacing the vehicle in the future, even if this cost is above the original price you paid. Take a look!
So there you have it, a quick run down of the differnet types of Gap Insurance available in the UK today. These types of cover are not retricted to cars either, with motorbikes, motorhomes, taxi's and vans also able to be covered. Ther are plenty more resources for gap insurance help on the web.
Hope you enjoyed our brief introduction into Gap Insurance!
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