So you are buying a vehicle on contract hire.
Are you sure it is contract hire?
I speak to customers day in day out who call and contact us to get a contract hire gap insurance quotation, yet within a few seconds it becomes apparent that the vehicle is not being bought on contract hire.
So why is this so important how you buy your vehicle and what is the difference.
There are some basic rules of insurance. One rule roughly interpreted means is that what ever type of insurance you buy you can not be in a better position had you where before the claim.
If you have bought your vehicle contract hire you can never own the vehicle and at the end of the contract you must hand the vehicle back. Because you can never own the vehicle you can not protect it being written off as it was not and could never be yours to protect. Instead you can simply protect yourself against any financial shortfall.
OK nice and easy so far. If I can never own it I can never benefit from it no longer being there. No problem. Well yes there should be no problem however each finance company calls their finance packages different things and it can be very confusing.
So we know what Contract hire is but what about..
- Personal Contract Purchase
- Personal Contract Plan
- Elect 3
- Operation Lease
- Operation Lease Hire
The list goes on.
One of the most important things when considering gap insurance is to find out if you can ever own the vehicle. You may never want to in fact some finance packages actively encourage you to change or hand it back but you must have the choice. If you do you have far more options available to you in the ways in which you can protect your investment. Instead of simply protecting any financial shortfall you can now protect the invoice price or even the replacement cost.
So before you buy any form of gap insurance for your ” Contract Hire “ ask yourself can I own the vehicle if I wanted to at the end of the agreement?