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So from 13th January 2015 the following features have been introduced.
Vehicle Invoice Protection for Combined Vehicle Replacement Insurance
From 13th January 2015 a GapInsurance123 Combined Vehicle Replacement Insurance policy will pay the difference between your motor insurers settlement and the higher of:
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The cost of a replacement vehicle matching your original vehicle specification, age and mileage at the time your bought it
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The original net invoice price you paid
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The outstanding finance settlement
Why have we added this feature?
There are two reasons really. The first one is in response to questions we regularly get from our customers....
Is Return to Invoice or Vehicle Replacement best for me?
The age old choice between Return to Invoice and Vehicle Replacement Insurance can be a difficult choice for many. On the one hand you can protect the original invoice price you paid, or perhaps if you feel that the cost of a replacement could be higher than this then you could take a Vehicle Replacement policy.
To answer this question you would have to know whether the original price you paid, or the future replacement cost would be higher. Of course no one can actually be sure of this.
If you buy a brand new vehicle with a heavy discount, then the replacement cost will probably be higher than the original price you paid.
If you buy a brand new vehicle that is a brand new model on the market then the replacement cost may actually be cheaper in the future, as the manufacturer may not yet apply discounts that you may find are around when you are looking at a replacement.
You see the choice between Return to Invoice and Vehicle Replacement can rely on factors that you simply cannot know for sure when buying the policy. However we think our new 'VIP' feature on VRI Gap provides the perfect solution.
Our new Combined Vehicle Replacement products have had a 'Vehicle Invoice Protection', or VIP for short, added. This means that in the event that the replacement cost of the vehicle is actually lower than the original price you paid, then the policy will actually cover you to the original price you paid instead.
To give you an example of how this works:
New vehicle in 2015 is £15000, a replacement new vehicle in 2019 is now £17000 - Gap123 Vehicle Replacement would cover to the 2019 new vehicle price of £17000
New vehicle in 2015 is £15000, a replacement new vehicle in 2019 is now £14000 - Gap123 Vehicle Replacement would cover to the original invoice price in 2015 at £15000.
In the second example, our old VRI products would cover to the 2019 new vehicle price of £14000, as may all the other Vehicle Replacement Gap products in the market that we have looked at currently.
If you cannot be sure whether the future replacement cost will be higher than the original price you paid, and we would argue that no one can ever guarantee this 100%, then our new VIP feature takes all the guesswork away for you.
The second reason is a much more practical one.
We have looked back at the claims we have seen on our Vehicle Replacement Gap sales to date, and we have found actual cases where the customer may have benefited more financially if they had originally purchased a Return to Invoice policy instead of Vehicle Replacement.
Let us be fair here, on most occassions the future replacement costs will be higher than the original price you paid, comparitive vehicle prices generally creep up over time. However, no one can absolutely guarantee that this will be the case.
So if you are wondering whether Return to Invoice of Vehicle Replacement is best for you, unless you can say 100% that the future replacement cost will be higher than the original invoice price paid, then our GapInsurance123 Vehicle Replacement has taken the guesswork away for you.
And what is more we are not increasing our Vehicle Replacement premiums either!
Once again GapInsurance123 look to lead the way with value and product features.