What is negative equity gap insurance in fact what is negative equity.
Negative equity is when you owe more than your vehicle is worth. Normally when members of the public change their vehicles we all like to think that we will have paid off more and that the vehicle will be worth more. So negative equity we all hope will never affect us. But it doesn’t and often through no fault of our own.
A recent trend has seen customers trading vehicles in early to take a more economical option. Or perhaps the increase in redundancies and unemployment means that we are all looking for ways to make our money go further.
Changing to a more economical vehicle can be one solution in that other associated costs are reduced. You can save on the insurance , fuel and monthly payments.
Also it is a hard fact of life but some vehicles just loose a lot more than others and negative equity is not something anyone ever wants to be it yet thousands and thousands of member of the general public are.
So you have had to change your vehicle and carry over negative equity.
So you wisely decided to protect yourself with gap insurance. Did you know that most policies will not cover negative equity in any form. So lets say that two years later your vehicle is written off. Any amount of negative equity you carried forward would not be covered and would not form part of your gap insurance settlement.
So read you policy before you buy. Don’t forget no matter what is ever said it is the policy documents which will form the contract. So check, read them and read again. If you are in any doubt ask the insurance company. After all they are the ones who will write the cheque.
In brief if you have negative equity make sure you look at a specialist negative equity gap insurance policy otherwise you may not be as protected as you think your are!