What does Combined Return to Invoice Mean?

How much is your used car worth and why does it matter?

When you are shopping around for gap insurance especially on the Internet it is easy to become confused with all the different levels of cover, so what is a a combined level of return to invoice cover and does it make a difference?

As always the answer depends on you, your circumstances and how you paid for your vehicle.

We all know that a standard form of return to invoice gap insurance pays the difference between your vehicles valuation on the day it is written off and the original invoice price your paid.

Yes there may be some variations for example some levels of return to invoice gap insurance will not cover any paint protection, some will not cover non-transferable warranties, so you will need to read your gap insurance suppliers terms and conditions before you buy. But in essence apart from your road fund licence it will do exactly what is says on the tin.

So if this is a standard policy what added advantages can a combined level of return to invoice gap insurance offer?

Well the simple answer is that if you have been lucky enough to pay cash for your vehicle then it will be absolutely no difference at all.

If you have however paid for your vehicle using a form of finance and only had a modest deposit then it may be worth thinking about. This is because very early on into a finance agreement with interest you if you have used a small deposit you may in fact owe more than your vehicles original invoice price. So if your vehicle was written off at this point simply getting all of your money back would still leave you with a shortfall.

This is especially true if you have bought a brand new vehicle. We all know that VAT and the fact that the vehicle is now officially classed as pre-owned or used means that the first few months of a new vehicles life is the time where it will depreciate the most and the quickest.

Don’t forget that the Vat alone on the cost of a vehicle for £11000 is £2200, add in the fact that is now not brand new and we hope that you can understand just how quickly those first few months can affect your vehicles valuation.

This is exactly where a combined return to invoice gap insurance policy would come into effect as it is in fact a hybrid of two forms of gap insurance. A marriage of finance gap insurance and standard return to invoice.

The difference being that your policy would now pay the difference between your vehicles valuation and either the amount of money outstanding on finance or the invoice price which ever the the higher.

So if you owe more than the original invoice price you are covered. If you don’t it performs exactly like a standard policy.

In brief combination return to invoice gap insurance should be a consideration if you want a return to invoice gap insurance and have used a small deposit.

 

 

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One Response to “What does Combined Return to Invoice Mean?”

  1. [...] already know that return to invoice gap insurance protects the invoice price when your vehicle is written off. In short it pays the difference [...]

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