There are few purchases as exciting as buying a new car. With so much to think about, there are a few areas that are sometimes overlooked by motorists and this can come back to haunt them down the line. The best example of this is GAP insurance – without this, a motorist could find themselves out of pocket by thousands of pounds and left without a vehicle.
What is GAP Insurance
So, what exactly is GAP instance? This is an optional policy that will pay any shortfall between a payout from your comprehensive motor insurance and the amount outstanding on the finance agreement or the original amount paid for the car if the car were to be written off. It is not known by all motorists, but a comprehensive insurance policy will only pay the current market value of the vehicle and this can be a significant amount less due to depreciation. The car can lose around 35% of its value after just one year, so it is a smart purchase if it is a brand new vehicle or a second-hand vehicle as it can up to around 70% after three years.
Why It is Important
Unfortunately, write-offs occur far too often and this can easily be the fault of someone else. In addition to collisions where it is declared a total loss, an insurance company will classify an automobile as a write off if it is damaged by fire or stolen and never recovered. Car crime is a big problem in this country and criminals will often target new or high-value vehicles.
It is clear that GAP insurance is an intelligent purchase to make when purchasing a new car. Another important factor to consider is the warranty – when purchased brand new, you will benefit from a manufacturer warranty such as a KIA warranty but after this expires you should take out an extended warranty. This will cover the cost of any mechanical or electrical faults and these can occur at any moment in an automobiles lifespan.
Buying a car is a huge purchase and one that must be taken very seriously. There are always a few areas that are overlooked when purchasing a vehicle and it is important that motorists are aware of this so that they can avoid costly mistakes. Taking out a GAP insurance policy and thinking about warranty cover are two crucial aspects when purchasing a vehicle and they could both save a motorist a huge sum.