The Death of Return to Invoice Gap Insurance - RIP
Your insurance company pays you your cars valuation of the day it was written off.
Wait a minute you wisely bought gap insurance from your dealership when your bought the car so you are one of the lucky ones you protected yourself against just this type of situation or did you?
Standard return to invoice gap insurance which is the type of insurance offered by most main dealerships literally pays the difference between your bikes valuation and the invoice price you paid.
Sounds good well no actually it may not be, let me show you what I mean....
2011 You are lucky enough to treat yourself to a new lets say Ford Focus. You haggle and manage to get a fantastic deal for £15,500.
2013 You car is stolen, its valuation is £10400. Your return to invoice gap insurance policy pays you the difference to take you back to the £15,000 you paid.
But wait they changed the model just after you had bought your car. Yours was a good specification diesel and the cost of the new model is now closer to £18000.
So hold on your protected yourself against this happening and your are still £3000 short????
The latest style of gap insurance called VRI - (vehicle replacement insurance) would pay the difference between the cost of your Focus's valuation and the cost of the same or nearest model. In this example you can not buy another new, old shape Ford Focus so the next nearest model is £18000. You would now receive a cheque for £7600.
Vehicles are assets that lose value of time but that does not stop the manufacturer increasing the price.The vat increase in January put an average of over £500 per new car and in recent years some manufactures have increased their list prices by over 10 % for example.
Ford KA 1.3base level petrol
• List Price 2007 £7,995
• List Price 2011 £8,545
• Difference £560
Toyota Avensis 2.0 D Estate base
• List Price 2007 £16,350
• List Price 2011 £20,065
• Difference £3,715
VW Golf GTI 2.0 FSI 3dr Petrol
• List Price 2007 £20,607
• List Price 2011 £25,045
• Difference £4,438
That is still a large amount of capital needed.
So dose vehicle replacement gap insurance - VRI mark the death of return to invoice styles of insurance?
We think so but the choice is yours?
Wait a minute you wisely bought gap insurance from your dealership when your bought the car so you are one of the lucky ones you protected yourself against just this type of situation or did you?
Standard return to invoice gap insurance which is the type of insurance offered by most main dealerships literally pays the difference between your bikes valuation and the invoice price you paid.
Sounds good well no actually it may not be, let me show you what I mean....
2011 You are lucky enough to treat yourself to a new lets say Ford Focus. You haggle and manage to get a fantastic deal for £15,500.
2013 You car is stolen, its valuation is £10400. Your return to invoice gap insurance policy pays you the difference to take you back to the £15,000 you paid.
But wait they changed the model just after you had bought your car. Yours was a good specification diesel and the cost of the new model is now closer to £18000.
So hold on your protected yourself against this happening and your are still £3000 short????
The latest style of gap insurance called VRI - (vehicle replacement insurance) would pay the difference between the cost of your Focus's valuation and the cost of the same or nearest model. In this example you can not buy another new, old shape Ford Focus so the next nearest model is £18000. You would now receive a cheque for £7600.
Vehicles are assets that lose value of time but that does not stop the manufacturer increasing the price.The vat increase in January put an average of over £500 per new car and in recent years some manufactures have increased their list prices by over 10 % for example.
Ford KA 1.3base level petrol
• List Price 2007 £7,995
• List Price 2011 £8,545
• Difference £560
Toyota Avensis 2.0 D Estate base
• List Price 2007 £16,350
• List Price 2011 £20,065
• Difference £3,715
VW Golf GTI 2.0 FSI 3dr Petrol
• List Price 2007 £20,607
• List Price 2011 £25,045
• Difference £4,438
That is still a large amount of capital needed.
So dose vehicle replacement gap insurance - VRI mark the death of return to invoice styles of insurance?
We think so but the choice is yours?
Jackie Verdier
Aequitas Automotive Limited
T/A Easygap.co.uk
FSA 541186
BIBA 000652
VRI Gap Insurance
Gap Insurance
Article Source: http://EzineArticles.com/?expert=Jackie_Verdier Aequitas Automotive Limited
T/A Easygap.co.uk
FSA 541186
BIBA 000652
VRI Gap Insurance
Gap Insurance
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