What is Contract Hire Gap Insurance, how does it work and why may you want it? Contract Hire vehicles are extremely popular in the UK today, for both private individuals and business. However, a contract hire agreement is different from many other financial arrangements in one respect….you do not have the option to own the vehicle at any time.
Why is this important? Well simply you cannot benefit from the demise of the vehicle, as it remains the property of the leasing company. This means that Return to Invoice and Vehicle Replacement Insurance are of little relevence on a contract hire agreement.
If your contract hire vehicle is written off in an accident, or is stolen, then your leasing company will ask for two aspects to be covered, the market value of the vehicle AND a proportion of the outstanding rentals on the agreement.
So whether you have a car or a van, your contract hire, or lease gap insurance policy can help bridge the gap between the market value and the outstanding finance or rental settlement.
Years ago, Contract Hire Gap Insurance was often included in your monthly payments to the leasing company. These days, you have to ensure you are covered to the level you find appropriate, including contract hire gap insurance.
Both the EasyGap and GapInsurance123 websites offer Contract Hire Gap Insurance policies. However, are there any major differences between them? As always, there are a few significant differences you may wish to consider.
The EasyGap Contract Hire Gap Insurance policy must be bought within 180 days of the vehicle purchase, the GapInsurance123 policy can be bought at any point of your lease agreement.
The GapInsurance123 Contract Hire Gap Insurance policy will contribute the first 250 pounds of your motor insurance excess, whereas the EasyGap will not.
One aspect the policies do share is that you will not find a better price for contract hire gap insurance in the UK today!