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GAP Insurance - What Is It?
For many people buying a new car is a big deal. It becomes your pride and joy, and you would do anything you can to protect your new purchase. Unfortunately, the sad reality is that as soon as you drive your beloved car off the forecourt it automatically depreciates in value. Added to that, accidents happen and the chances are it may not even have been your fault, so don't take the risk - purchase GAP Insurance online to protect your investment.
Why have GAP Insurance?
Most vehicle owners don’t realise it, and it may be that you are one of them, but if your vehicle is declared a total loss by you motor insurer they will only settle at its current market value, even where you have purchased fully comprehensive insurance.
This leaves you with an amount that is significantly less that the amount you originally paid for your vehicle. Even more significant is the possibility that your insurance settlement is not enough to cover any outstanding finance you may have, not only leaving you without a vehicle but with you paying finance on a vehicle you no longer have.
The good news is this doesn’t have to be the case. You can avoid the financial shortfall that you would otherwise be left with by purchasing a GAP insurance policy from ALA and ensure you have protected your investment.
Why buy a Policy from ALA rather than a Dealer?
Policies offered to you by a dealer are almost always more expensive and are usually a lower quality product.
They can include clauses which restrict payment based on the market value or Glass’s Guide retail value of the vehicle and leave you with a shortfall. ALA doesn’t include either of these clauses and guarantees to pay the difference between your insurance company’s settlement and the amount you originally paid for your vehicle or its replacement cost.
ALA is UK Company, fully authorised and regulated by the FCA. Our policies are underwritten in the UK which means that your policy is fully protected by the Financial Services Compensation Scheme. As most other policies are underwritten outside of the UK their position can differ from a UK firm and the FCA recommends you look into their obligations.
Also, if you purchase a policy from ALA and change your vehicle before that policy is due to expire we will calculate the unused premium on a pro rata basis and use this as a discount on a new policy for you.
Back To Invoice+ Policy
Our BTI+ policy can be bought for a vehicle that you either purchased outright or purchased fully or partly using finance.
If your vehicle is written off by your insurer then this policy will either
- Pay the difference between your insurance company’s market value settlement and the amount you originally paid for the vehicle or
- Clear the full balance of outstanding finance – whichever is the higher amount.
For example - a vehicle purchased for £30,000 with £5000 finance would leave an outstanding balance of £35,000 if the vehicle was written off soon after purchase. In this instance if your comprehensive insurer settles at £28,000 this would leave £7,000 outstanding to the finance company and our settlement would therefore be £7,000.
If your vehicle was written off or stolen towards the end of the four years its value would be significantly lower but the amount of finance remaining would be minimal. If the insurance company paid out £15,000 ALA would pay the extra £15,000 to take you back to original invoice price of £30,000, as this figure would be the higher amount in comparison to the outstanding finance amount.
If instead you bought your vehicle outright and did not have any finance, the second example would apply to you. ALA would merely fill any financial gap left after you receive a payment from your motor insurance company.
Vehicle Replacement Insurance+ Policy
If you have bought or are buying a car or van and benefiting from a high level of discount, you could have little or no assurance that you could receive the same vehicle at the same level of discount if you needed to replace it in the future.
Additionally if the amount of VAT should rise again or manufacturers increase their prices, the amount you paid for your vehicle at the time of purchase would be a lot lower than it could be in the future.
If any of the above applies to you, you could benefit from our VRI+ policy, which would replace your vehicle with one of the same or similar specification as that you originally purchased regardless of the discount you received.
For example, if you pay £20,000 for your vehicle and it is subsequently written off, your insurance company may settle at £9,000. The cost of replacing that vehicle with a like- for- like new vehicle might be £22,000. We would then pay the £13,000 difference to a supplying dealer to get you a vehicle of the same Make, Model, Specification and Age as the one you originally purchased.
If you purchase a Contract Hire GAP policy from ALA for a vehicle that you have bought on a contract hire or lease agreement and it is written off, we will clear the balance of any outstanding rentals and cover any shortfall in the value of the vehicle.
Buying your GAP insurance policy from ALA means you can relax in the knowledge that you have done everything you can to protect your investment.