You can buy gap insurance on an annual basis just like your car insurance but there are disadvantages.
When you buy a gap insurance policy you are usually offer three years for your dealership. But when you buy online you can offered anywhere from one to five years.
You could if you want simply buy a one year gap insurance and then buy another policy at the end if you wanted to.
The only problem is that the type and levels of cover are not the same. OK so what do I mean. Well when you buy a gap insurance policy on line you are usually asked to confirm how long ago you bought the vehicle. In most cases this is up to 90 days after you have purchased however there are some companies who are even more flexible and allow up to 180 days.
After that time you can still protect yourself and your vehicle with gap insurance but instead of being able to protect the invoice price, opt for a replacement vehicle, or even clear outstanding finance you can only protect the value of your vehicle on the day your bought the policy. This is usually based on Parker’s guide private good or glass’s guide . This can be thousands of pounds less than the price you paid 12 months ago.
Given the choice and money no object if we are honest most of us would prefer a brand new vehicle. Don’t forget money no object. But it is a sad fact of life that as soon as you drive away from the showroom it will have lost even just the vat you paid. In fact teh 1st year of a vehicle life is when it looses the most money. So the difference between protecting your self with gap insurance within the magic 180 days and not can mean that you loose thousands of pounds worth of benefit.
I understand it can be confusing so let me show you what I mean.
You have just bought a new car and paid £14,000.
You are not sure how long you are going to keep the car so you buy a gap insurance return to invoice policy for one year.
At the end of the year you realise that you will now keep the vehicle for at least another year and possible two. Because you have had the vehicle for over the 180 days you can now only protect the vehicles valuation on the day you buy the policy.
This means that instead of protecting the £14,000 you paid your gap insurance policy will now only protect £9800.
We understand that on-one likes to pay for something that they will not use, and in most cases when you buy gap insurance from your dealership if you buy a three year gap insurance policy and change your vehicle after 18 months that’s it end of your policy.
The beauty of buying on ling gap insurance is that in most cases you can transfer the policy.
So with prices up to 85 % less than main dealerships can you afford to buy gap insuranceany where else but from an on-line broker?