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GAP Insurance Cover

It is a commonly held view that if a person’s car is damaged or written off through no fault of their own it will be adequately covered by insurance. In actual fact insurance payments rarely cover the full cost of restoring or replacing the vehicle as new and the claimant is usually out of pocket at the end of the process.

The value of a new car in particular depreciates rapidly as soon as it drives out of the showroom, and yet in the event of an accident only the current market value of the car is sometimes covered, and certainly this will be the case after twelve months of ownership. As a consequence the owner of the car will not be able to replace it with another new car without having to meet a considerable shortfall from his or her own resources.

The resolution to this dilemma lies in a thing known as GAP insurance cover. Whilst different providers sometimes cite different terms and conditions the basic premise of GAP insurance cover is much the same across the board. In essence what it does is to meet the difference between the current market value of the vehicle and the cost of purchasing a new one.

Many people do of course pride themselves upon owning a new car, and having to find part of the purchase price again so soon after having bought another vehicle straight off the production line can prove prohibitive even to the relatively affluent. But there are others who are in more urgent need of the relief that GAP insurance cover can provide.

Those who purchased their new vehicle using finance or a personal loan could, if the vehicle is stolen or involved in an accident, be left in a “negative equity” state of affairs in which the amount still owed is considerably higher than the value of the car. Worse still, if the car is written off the owner could potentially be faced with a situation in which he or she needs to purchase a new vehicle without having settled the account on the old one.

Thus GAP insurance cover alleviates any fears of being caught in a vehicular equity trap and leaves the unfortunate owner free to start the process again.

The most important two factors to consider when sourcing GAP insurance cover are price and terms. Prices for GAP insurance do differ considerably, and the terms under which the GAP insurance cover is provided are important and should be appropriate to your individual circumstances. Compare GAP insurance cover quotes online via the above websites and GAP insurance cover providers.

 
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