When vehicles are stolen and not recovered or written off, motor insurance coverage policies normally spend out only the approximate worth of the automobile, rather than its list cost at that point in time. This applies even if the incident happens relatively quickly soon after you invest in a new automobile. The purpose for this is depreciation new vehicles depreciate particularly immediately, occasionally losing something up to 50 per cent of their worth in the course of the initially two years they are owned.
If you have just purchased a new automobile, it is probably that the dealer will want to sell you gap insurance coverage to cover the distinction amongst what it price and what your insurer corporation would spend out if the automobile was stolen or written off.
Gap (Assured asset protection) insurance coverage covers the shortfall amongst what your motor insurance coverage corporation will spend out and the quantity you really paid for the automobile. This must give you sufficient cash to invest in one more automobile of the identical worth, or at least spend off a finance corporation if any cash is nevertheless owed on the automobile. If you bought the automobile with money, of course, this would not be an concern.
If you appear on the world wide web you will see that it is in all probability less expensive to get Gap insurance coverage from an independent corporation rather than from a dealer. To cover a shortfall of £7,500 it would price about £165 spread more than 3 years.
The query of regardless of whether Gap insurance coverage is worthwhile is a hard one particular. You could argue that the only way to obtain out is by being aware of the danger. What percentage of vehicles are, in truth, stolen and not recovered or certainly written off completely inside the initially 3 years of buy?
Statistics with regards to this data are tough to come by and even specifics which are offered can be conflicting. The on line insurer, Excite claims that half of all stolen vehicles are not recovered. Automobile-Finance.net, on the other hand, says the figure is one particular third. If you rely on the government's automobile theft index (albeit for 2004), it is older autos – vehicles aged 11-15 years that are in the highest danger category of getting stolen. Apparently, far more than 50 per cent of all vehicles stolen in the UK fall into this category.
Actually concrete figures definitely never exist. According to Vcheck, which obtains its data from the police, ABI and the DVLA, far more than three,000 vehicles have been written off and just about 300 stolen. And that was just in one particular day!
From the statistics offered it appears that new vehicles are clearly at a decrease danger of theft than older ones, however if you never take out Gap insurance coverage you will have no protection against your automobile getting written off or certainly not getting recovered in the, albeit not incredibly probably, occasion that it is stolen. With automobile insurance coverage currently at a higher level, a lot of buyers would in all probability attempt and resist paying out a additional £55 to cover the prospective shortfall danger. Like with all insurance coverage, it comes down to the query: What cost peace of thoughts?