Wednesday, January 22, 2014

High Value Vehicles and Gap Insurance

 by Thomas Luetchford

It is not yet clear whether high value vehicles depreciate more or less than the average vehicle. One side of the argument is that if a vehicle is worth more, it will have more room to depreciate and the other argument is, if the vehicle is worth more, it will be more likely to hold its value.
As you may or may not be aware, depreciation is the rate at which your vehicle will lose value over the course of ownership. It is said that the average vehicle using the average amount of mileage will lose approximately 50% of its original value within the first three years of ownership.
This will leave you vulnerable if your vehicle was ever written off or stolen, as your comprehensive motor insurer would only ever cover the market value of your vehicle on the day it was written off or stolen. For Example, if you have purchased a vehicle for somewhere in the region of £30,000, just three years later, your vehicle may only be worth somewhere in the region of £15,000.
If you woke up one morning in that third year and your vehicle had disappeared off the driveway, you would only ever receive the market value of your vehicle on the day it was declared a total loss. This could leave you thousands of pounds out of pocket and if you are paying for your vehicle through the form of a financial agreement, then you could be left paying for a vehicle you no longer own.
However, this is where Gap Insurance can help you. As it is not yet clear whether or not your vehicle will hold its high value or lose more than the average, it is only safe to cover yourself for the worst possible outcome.
There are a number of Gap Insurance providers online who now have the ability to offer claim limits from £5,000 to £50,000 ensuring you that there is a high enough claim limit for your circumstance. So, be sure to ask your Gap Insurance provider all about claim limit and whether the one you think you should choose is appropriate or not.
Claim limit can often be a taboo subject for certain providers online, as they often aim to recommend a lower claim limit than appropriate to make themselves seem a lot more less expensive compared to other providers. So, be sure to confirm the claim limit, type of cover and price when finding the best quote for you.
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