With Britain on the verge of a triple-dip recession and inflation steadily increasing, it may be hard to believe but car prices are on the increase – with the prices of some vehicles having risen at a much higher rate than that of inflation.
The sharp increase in prices for small to medium vehicle in the last few years is being attributed by manufacturers (including Ford, Renault, Vauxhall and Volkswagen) to an upgrade of a number of their models. According to Which? the worst culprit with the steepest increase in price looks to be Vauxhall’s Zafira and Astra, which have risen by more than £1300 in real terms since 2008.
Volkswagen has already increased its prices as of January 2nd 2013 whilst BMW have announced an increase of £330 across most of their range with further price increases expected to be implemented this month by Ford.
It is indisputable that car prices will continue to increase. The effect of this is that ordering a brand new ‘13 plate vehicle that costs around £20,000 could mean that buying an equivalent car in 3 or 4 years time could cost at least £2000 more. This price increase may be felt even more keenly if that vehicle is written off – not only leaving a financial shortfall but also resulting in a situation where a settlement of market value is received from the comprehensive insurer.
Standard GAP policies can protect against a shortfall but only to a limited extent where the value of the car increases. Even with a Back to Invoice policy, to get that same car brand new, would require a substantial extra sum of money – even more so if the dealer originally gave a discount.
With all of this in mind, you are able to protect your investment in the event of a write off by purchasing a Vehicle Replacement policy from ALA. This will either pay the difference between your Comprehensive Insurance settlement and replacing your vehicle new for old or with a vehicle of a similar age to the one originally bought or clear the outstanding finance, whichever the greater. This means that the additional cost to replace your vehicle is covered by the policy.
It is worth noting that some GAP providers offer the ability to defer a policy for 1 year to allow for the “new for old” facility that some comprehensive insurers have. The danger here is that the comprehensive insurer may, for various reasons (including mileage, condition of the vehicle and, in some instances, where the vehicle is stolen) to revert back to market value. The deferral of the GAP policy then leaves a financial shortfall.
ALA, for this reason, does not defer policies. However, if the comprehensive insurer does revert back to market value ALA will simply issue you with a new policy on the replacement vehicle free of charge.
Buying your policy from ALA will leave you with the total peace of mind that comes from knowing that your new pride and joy is fully protected.
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