Although we all try to be as careful as we can out on the road, inevitably accidents can and do happen.
Whether your car skids off the road on a patch of black ice, or you get T-boned coming out of a junction – if you’re driving on the road there’s always a chance your car might end up taking the brunt of a collision.
One way to prepare for the unexpected is to take out “gap insurance”.
Here’s our guide to what gap insurance is and how it could benefit you.
What is gap insurance?
Gap insurance is a type of insurance policy that will help you afford a new car should you write off your current one.
Typical car insurance will normally compensate you for the amount your car is worth at the time, not at the time of purchase.
As cars depreciate by around 40% in the first 3 years, if you bought a new car that gets written off – you could be out of pocket!
And with 1 in 4 UK adults at financial risk, that’s not something to take lightly.
However, the good news is that gap insurance is really cheap to take out, especially when compared to other insurance policies.
But if you need further convincing, we’ve compiled our top 5 reasons to get gap insurance.
1. It helps you to afford a new car in the event of an accident
If you purchase a brand-new car for £30,000 which gets written off after two years, insurers may pay out a settlement of £12,000, considering depreciation for example. Meaning the payout wouldn’t cover the cost of a new car.
If you’d like to be paid the original value of the car instead of its current value – get gap insurance!
2. You have purchased a car on finance
When you buy a car on finance, if it is written off, you’ll still be liable to pay back the full amount owed.
To avoid having to pay monthly for a car that doesn’t exist, gap insurance is a great idea.
3. You can buy a gap policy for up to 5 years
Rather than having to renew every year, gap insurance can be taken out at irregular intervals.
This means that you can take out your policy and forget about it.
This is especially beneficial if you take out the gap insurance for the full duration of your lease or finance agreement.
4. It’s really affordable
You may think that gap insurance is expensive if it covers the cost of a new car.
But it’s not! In actual fact, gap insurance is one of the most affordable types of insurance to take out – and also one of the most beneficial if you have a new(ish) car.
5. It guarantees peace of mind
Finally, having gap insurance ensures you have peace of mind.
By having a comprehensive gap insurance policy, you can drive around happily in the knowledge that should you have an accident, you won’t have to fork out too much for a new car.
Although parting with more cash can be hard, a good gap insurance policy can really save your skin in the event of an accident.
Have you taken out yours yet?