There are few purchases as exciting as buying a new car. With so much to think about, there are a few areas that motorists sometimes overlook, and this can come back to haunt them down the line. The best example 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 the GAP instance? All motorists do not know it, but a comprehensive insurance policy will only pay the vehicle’s current market value, which can be significantly less due to depreciation. This optional policy would 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. 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 or a second-hand vehicle, as it can go up to around 70% after three years.
Why It is Important
Car crime is a big problem in this country, and criminals often target new or high-value vehicles. Unfortunately, write-offs occur far too often, and this can easily be someone else’s fault. In addition to collisions that declare 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.
Another important factor to consider is the warranty. GAP insurance is an intelligent purchase to make when purchasing a new car. 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 which can occur at any moment in the lifespan of an automobile.
A car is a huge purchase and must be taken very seriously. There are always a few overlooked areas when purchasing a vehicle, and motorists must be aware of this to 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 save a motorist a huge sum.