It’s a well-known fact that as soon as a car leaves a forecourt or showroom, its value begins to depreciate.
Following a motor accident, most motor insurers will usually only pay the current market value of a vehicle, which can drastically differ from the original amount paid. This can often leave a customer out of pocket, potentially by thousands of pounds.
Thankfully, there is a product that can help to cover people in these circumstances – Guaranteed Asset Protection (GAP). We’re taking a closer look at GAP cover, what it does and the benefit of offering it to your policyholders.
How does GAP cover work?
GAP cover protects policyholders from being left out of pocket if there is a difference between the market value of a vehicle and the price they paid for it.
For example, if a customer purchased a vehicle for £5000 and this was written off by an insurer who agreed to pay the market value of a vehicle at £2500, this would leave the customer with a £2500 shortfall to make up.
GAP cover pays the difference between the amount offered by the insurer and the purchase price of the vehicle, making up the additional £2500 and providing the customer with the full value of a vehicle based on what they originally paid as opposed to the current market price.
Why is GAP cover helpful?
In the event of an accident where a vehicle is written off, a customer will need to find a replacement vehicle, but could also need to pay off any outstanding finance on their current car.
This can naturally often raise concerns about being able to afford a proper replacement. GAP cover allows a customer to not be left facing a financial loss and puts them in a much stronger position to either replace their written-off vehicle with a like-for-like replacement, or settle their existing finance agreement before arranging a new one.
This can be a huge help in taking the stress out of replacing a vehicle, providing a customer with greater peace of mind and getting them back on the road much more quickly.
Offering your customers more effective services
A customer expects the products and services they pay for to provide the level of cover they need.
At Coplus we’re dedicated to making sure that the businesses we work with are able to provide their customers with the right products that meet their requirements. This includes GAP cover that can help protect policyholders from any potential shortfalls following an accident that writes off their vehicle.