In the event of your vehicle being declared a write-off by your insurance company because of theft or an accident, there may be a shortfall between the vehicle's current market value and the value required by the lease/finance company to settle the lease/finance agreement.
The shortfall could be a significant sum depending on the rate of depreciation of your vehicle and the remaining period of the lease/finance agreement. You will be held liable for the shortfall by the lease/finance company, however GAP Insurance protects you by paying the lease/finance company this shortfall on your behalf.
Who is GAP Insurance for?
Customers using Contract Hire or Finance Lease to obtain a vehicle, where their requirement is simply to get out of the agreement without financial penalty should a valid claim be made.
GAP Insurance Example
A customer buys a BMW 3 Series Saloon for £19,228, with a deposit of £1,200 and finances the remainder.
18 months later the car is involved in an accident and is written off.
The insurance company settles £12700, but the customer still owes the Finance Company £13,831.
The GAP Insurance plan will pay the £1,131 shortfall between the Insurance Company payout and the amount due to the finance company in settlement. |
