As car sales soar – mind the insurance GAP
In September, registered sales of new vehicles reached their highest level on record, across business and private sales. So far in 2015, over a couple of million cars have been registered, the first time the two million milestone has been passed in 11 years.
If you’re one of the many buying a new car this autumn, be aware that your motoring insurance may only cover the value of the car at the time of the claim. That means the payout from the claim if your car is written off or stolen may not cover the cost of a replacement that’s a similar model.
However, if you take out GAP insurance you will guarantee you get the money you originally paid for your motor. As the name of this product suggests, the shortfall or gap between the insurance settlement offered and the car’s value at the time of purchasing is bridged.
So, for example, if you paid £39,000 for a vehicle a few years back but it’s now only worth £17,000. To buy another model that was the same, you’d need to find another £22,000.
With this product, you can bridge the gap and it can help if you are still settling outstanding payments on your car.
It’s also worth bearing in mind that in some cases a car can still be considered ‘written off’ if it’s not reparable to its pre-accident state, or if the cost of doing so would exceed a percentage of its current value.