Contact Hire Gap Insurance – Did you know that you could be driving around in a financial time-bomb?
Do you currently drive a car or van on contract hire or lease?
Do you own a company that has cars or vans on your fleet that are funded on contract hire or lease?
Do you own a small business that relies on a vehicle for everyday business?
If the answer is yes to any of the above questions you should check your finance agreement urgently and check to see if you have contract hire gap insurance cover!
Most drivers of contract hire vehicles are completely unaware of the potential costs that they face in the event that their vehicle is written off!
If your hire agreement does not have built in gap insurance cover, you or your company is liable for 100% of any outstanding rentals or payments in the event of a total loss claim.
For example, let’s say you are a builder and have a van on contract hire or lease. You are paying £250 per month plus VAT on a 3 year contract hire agreement. Seven months into the agreement your van is written off as a result of theft or accident. If you choose not to take out gap insurance when you signed your agreement you would be 100% liable for all remaining payments to the finance company in the event that there is a shortfall between the amount the contract hire company require to settle the agreement and your motor insurance pay out!
Here’s an example of what could happen!
Original cost of van or car: £20,000
Deposit: £2,000
Amount of loan: £18,000
12 months later the vehicle is stolen or written off in an accident and declared a total loss.
Amount still owing to the finance company
in non-paid rentals: £12,000
Your insurance company pays you only: £8000
You or your company would be
Liable for the difference: £4000
Could your business afford to pay a bill of this size?
The reason why you or your company could be liable is due to the fact that you are agreeing to pay all monthly payments to the finance company when you sign your contract hire or lease agreement!
There are literally thousands of vehicles driving around on the UK’s roads that are financed using contract hire or finance lease and many of them have no gap insurance cover.
Taking out contract hire gap insurance can protect your investment and ensure that you or your business is not financially exposed in the event of a total loss claim.
You might be surprised how little it costs to protect your contract hire or lease vehicle. You can buy gap insurance online from as little as £60, which is a small price to pay for total loss gap insurance cover.