The whole idea of contract hire is that you never own the vheicle so why do you need contract hire gap insurance?
I have my motor insurance why do i need contract hire gap insurance?
Contract hire can be a real soltuion to buiness vehicles. Instead of having to commit to long and expensive hire purchase agreements or dinting your cashflow by paying in cash, it allows low commitment and low expence.
Usually you are asked to pay anywhere from 1 to 3 payments in advance as a deposit. You then make payments plus vat until the end of the agreement. At the end of the agreement you simply hand the vehicle back. So you are literally enjoying the vheicle in the best time of its life and handing it back before the expensive MOT’s and services arrive perfect!
Well it can be. But what happens if something goes wrong. What happens if your vehicle is written off during the agreement.
You may think that your own motor insurance will pay you the market value and that is that, well no sorry its not. You contract hire company will have based your monthly rentals depending on many factors an important one of which is how much they will be returned in the form of a vehicle at the end of a contract.
Well you have no vehicle to return, but did you know that your contract hire company are within there rights to ask for up to 90% of any outstanding rentals in the form of a settlement.
Let me show you what I mean.
Lets say you buy a vehicle for £299 & vat per month. It is on 36 month contract and unforuntatly 18 months into the agreement the vehicle is involved in an accident in which thank fully no-one is hurt but the vehicle is written off.
It would be bad enough to loose the vehicle but imagine then being sent an invoice for £5382 & vat. That’s a Total of £6458.40. So no car and a big invoice, thought contract hire was supposed to be cost efficent.
Well it can be with Contract hire gap insurance
Contract hire gap insurance is a way of protecting yourself against this happening. In the event of a write off contract hire gap insurance can pay the difference bewteen your vehicles valutaion and the outstanding rentals.
Its is quick, simple and easy an you can arrange one years contract hire gap insurance from as little as £39.
Ok so even with contract hire gap insurance you would still have no vehicle but you would now have no financial liability to your old agreement.
In brief – with contract hire gap insurance prices costing on average 50 % less than one months payment can you afford not to protect your vehicle ?