In the event of your vehicle being declared a write-off by your insurance company because of theft or an accident, there may be a shortfall between the vehicle's current market value and the value required by the lease/finance company to settle the lease/finance agreement.
The shortfall could be a significant sum depending on the rate of depreciation of your vehicle and the remaining period of the lease/finance agreement. You will be held liable for the shortfall by the lease/finance company, however GAP Insurance protects you by paying the lease/finance company this shortfall on your behalf.
Customers using Contract Hire or Finance Lease to obtain a vehicle, where their requirement is simply to get out of the agreement without financial penalty should a valid claim be made.
A customer buys a BMW 3 Series Saloon for £19,228, with a deposit of £1,200 and finances the remainder.
18 months later the car is involved in an accident and is written off.
The insurance company settles £12700, but the customer still owes the Finance Company £13,831
The GAP Insurance plan will pay the £1,131 shortfall between the Insurance Company payout and the amount due to the finance company in settlement.
In the event of your vehicle being declared a write-off by your Insurance Company because of theft or an accident, there is likely to be a shortfall between the vehicle's current market value and the original purchase price. This is PPP (Purchase Price Protection) Gap Insurance.
The shortfall could be a significant sum depending on the rate of depreciation of your vehicle. PPP will bridge this gap.
Customers obtaining vehicles by any method where they have the option to take ownership of the vehicle, such as those customers financing the purchase of their vehicle using Hire Purchase, Lease Purchase, PCP or cash. Designed for customers wishing to retain as much equity as possible in the event of a valid claim.
A customer buys a BMW 3 Series Saloon for £19,228, with a deposit of £1,200 and finances the remainder.
18 months later the car is involved in an accident and is written off.
The insurance company settles £12700, but the customer still owes the Finance Company £13,831.
The GAP Insurance plan will pay the £6,528 shortfall between the Insurance Company payout and the original invoice value of the vehicle less any extra items. |
