White vans, large vans, mini vans, refrigerated vans! They are all the workhorses of businesses up and down the country and play a vital role in delivery goods and services all over the UK.
In many small businesses, the van is the single most important asset. Without it, goods cannot be delivered and Companies cannot function.
What would happen if your van was suddenly destroyed due to accident damage or theft?
You could always hire a replacement whilst your vehicle is in the body shop, assuming your motor insurance policy provides adequate cover! You could also buy a replacement van, assuming that the Company finances allow you to?
Whist most vans may not depreciate as much as cars do, they still drop in value as soon as they are registered.
How Van Gap Insurance could save you a fortune!
Most commercial vehicles are purchased using some form of finance. Leasing, Contract Hire and straight forward hire purchase form the majority of finance plans used today. Unlike cars, most finance agreements on vans are structured around very low deposits. Cash is king in many small businesses and as a result commercial vehicles are purchased using as little capital as possible.
Low deposit finance agreements are fine, except when you need to pay off the outstanding finance balance during the early years of ownership, particularly where the finance agreement is over a long period, such as 5 years.
Is you are unlucky enough to be involved in an accident that results in your van being written off, or your van is stolen, you could be in for a shock!
Most van insurance policies will only payout an amount equal to the current market value at the time a claim is made. For example, a new van costing £25000 will lose up to 40% of its value during the first two years of ownership. An insurance claim could leave you seriously out of pocket as any payout will almost always be significantly less than the original purchase price or finance settlement amount.
How do you protect your business asset?
Whilst many of us shy away from insurance products where we can, taking precautions to protect your business and lively hood should be a top priority!
What would happen if your van was written off today? Would you be able to replace it? How would this affect your business?
Van Gap Insurance is designed to bridge the gap between the insurer’s payout amount and the original invoice price.
Types of cover available
ALA Insurance offer GAP Insurance for most vans. Policies are designed to cover light vans weighing up to 3.5t.
Cover is available for vans that are up to 5 years old with gap policy durations for up to 5 years. Cover levels range from £10,000 to £20,000 and are available for vans purchased using traditional finance, leasing or Contract Hire.
Contract Hire Gap Insurance
This type of gap cover is specifically designed for vehicles that have been funded using contract hire finance and is suitable for both Business Contract Hire and Personal Contract Hire agreements.
One of the main benefits is that rentals are paid-off in the event that your van is written off, which could save your business thousands of pounds in the event of a claim.
For example, a typical van Contract Hire or Lease agreement based on a 36 month contract with an initial deposit of 3 rentals in advance leaving 35 rentals to pat at a monthly rental of £300 plus VAT.
In the event of a total loss insurance claim four months after purchase there would still be 31 rentals due to the finance company, which would equal £9,300. This amount would be covered by a van gap insurance policy.
Without a GAP insurance policy, many leasing companies will charge you up to 100% of any outstanding rentals in the event that your van is written off due to the fact that your fully comprehensive motor policy will not cover outstanding finance rentals!
Not exactly good news for your cash flow!
For a comprehensive online quote click here to visit ALA Insurance for the lowest quote on Van GAP Insurance.