There is no feeling quite like buying a brand new car and you will be eager to get on the road. Getting into an accident in this automobile will be the last thing on your mind, but actually, it is something that you should prepare for as otherwise it could end up being extremely costly.
A Costly Gap for Write-Offs
This is because if the car were to be written off, your insurer will only pay the current market value of the car – this is true even with fully comprehensive insurance. This amount will be significantly less if you bought it brand new due to the rapid depreciation of new automobiles. The amount that you receive will, therefore, not be enough to replace the automobile or the amount outstanding on the finance agreement.
How to Protect Your Investment
So, what can be done about this? GAP insurance protects your investment by covering the difference between the insurer’s payout and either the original amount that you paid or the amount still owed. Although this is valuable for all motorists, GAP insurance is particularly important for anybody driving a brand new car – by the end of the first year of ownership, it could have lost around 40% of its value and 77% after 3 years.
Why You Need It
Many motorists believe that they do not need GAP insurance as they are a careful driver and believe that they will never get into a serious accident. Even the best drivers can get into serious accidents and often these are not the fault of the motorist – each day there are countless collisions on the roads in the country and many of these result int the automobile being written off. Not only this, but vehicles which are stolen and never recovered are often written off by insurance companies and there are over half a million cars stolen each year. One-third of these are never recovered. As a result of these statistics, it is not worth the risk and particularly if you purchase a new car.
Obtaining a Policy
You could obtain this cover from a dealer when you purchase a vehicle, but it is a smarter to purchase a policy from a specialist like ALA. These are often more affordable and will guarantee that you receive the difference between the settlement and the original cost – this ensures that there is no shortfall that you have to cover yourself.
Write-offs occur far too often and this is not always the fault of the motorist. If you purchase new, GAP insurance is especially important and could save you a fortune.