If your motor insurer provides ‘new for old’ cover in the first year, we have a deferred Gap Insurance option available at no extra cost. So, if you plan to keep your vehicle for 4 years – you only need to purchase a 3 year Gap Insurance policy and ask to have it start in 12 months time !
Please bear in mind that whilst a Gap Insurance start date can be deferred – the purchase of the policy cannot be deferred in the same way. If you are about to enter into or have entered into a Contract Hire agreement, your insurers ‘new for old’ cover is highly unlikely to be sufficient to cover the outstanding rentals your leasing company may charge – even if they do receive a new for old payment.
There are some vitally important things you need to do and consider before choosing to defer;
Motor insurers often refer to ‘new for old’ within their terms and conditions but in most cases they do not clearly or fully define ‘new for old’ and it is often very different to what you the policy holder expects. Here are a few of many examples we have seen from some major insurance companies;
Before considering deferring your policy, we would encourage you to seek written clarification from your insurer to enable you to fully understand what they will and will not pay for in the event of a claim in the first year – as this could influence your decision to defer your Gap Insurance.
We would suggest you ask them to at least email you their answer to this question;
“Are there any circumstances in the first year that you would not reimburse me the full invoice price I paid or the additional cost if this model has increased in price?”
If you are happy with their written response, you can choose to defer the start date of your policy by up to 12 months from the date your vehicle was first registered.
There is also one other matter you need to consider. If your motor insurance is due for renewal in that year and you intend to ‘shop’ around for a cheaper offer, do bear in mind the new insurer may not honour the ‘new for old’ because the vehicle was not insured with them from new. If you have deferred your gap policy and you change to an insurer that will not honour the ‘new for old’ arrangement – you could face a period in which a) the new insurer is not providing new for old cover and b) the Gap Insurance has not commenced and this scenario would obviously create a substantial loss if a write off occurred.
Assuming you are happy with your insurers commitment to provide first year ‘new for old’ cover and you will not be changing insurers in that first year, you can take advantage of a Gap Insurance deferment. No matter where you buy, Return To Invoice and Vehicle Replacement Gap Insurance must be purchased within 180 days of delivery, and you may then tell us when you would like your policy to start.
Some Gap Insurance providers charge for deferring policies or their premium may be higher – but we have negotiated a no charge deferment with our insurer to bring even greater value to our product range.
Here is a handy checklist to help you consider a policy deferment;
If you wish to talk this through with us, call us today on 01438 870615 or email us at [email] or ‘Live message’ us using the facility in the lower left of your screen.