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Brexit, car buying and Gap Insurance
Following the result of the EU Referendum in the summer just about everyone from all walks of life has been trying to work out what the implications may mean for them. Of course, we at Gap Towers are no different in that we have to consider how any changes to the industry we work in could change how we do things moving forward.
What has been quite clear in the press has been a concern that imported goods, including motor vehicles may see a sizeable increase in retail prices over the next few years. The fall in the value of the pound may only accelerate that process.
So accepting the wisdom that car prices may increase, what does that mean for Gap Insurance?
Well, it is far too early to say what the effect of higher priced vehicles may be. It may be sensible to assume that a higher priced vehicle could have further depreciation to suffer than it may if purchased at a lower price. If this was to increase Gap Insurance claim values then premiums may rise. This point may ring of some sense at the moment but it would remain speculative until we get to that point.
However, one very good question was raised in the office the other day and that was simply
With Brexit in mind what may be the best form of Gap Insurance to get?
Accepting the argument that vehicles purchase prices may go up then there may be only one winner. Combined Vehicle Replacement can cover you to the future replacement cost of your vehicle at the time you make a claim. For example, if you buy a brand new Ford Focus today for £22,000 then the future replacement cost could be £24,000 if car prices increase. If you only take the more basic Return to Invoice Gap Insurance then you will be limited to the original £22,000 you paid. This may not be enough to replace the vehicle if prices increase in the future.
Of course, this is speculation and you could never predict with absolute certainty that the replacement cost of your vehicle in the future could be higher than it is now. But remember Combined Vehicle Replacement Gap Insurance from GapInsurance123 carries one very clever 'fall back'.If the cost of the replacement vehicle actually ends up being lower than the price you paid originally then with GapInsurance123 VRI we will simply revert back to the invoice price you paid. Not all VRI Gap products in the market will do this and we have seen with some claims where this added feature benefits our customers where they would have lost out if they had bought Replacement Gap elsewhere.
All that said if you want to future proof your Gap Insurance then Combined Vehicle Replacement Gap from GapInsurance123 really does cover all bases we think.
