Why should you think about Vehicle Replacement Insurance?

Why could vehicle Replacement insurance be the best level of cover for you?

With most members of the public still under the impression that there is only one form of gap insurance ( Return to Invoice) what is vehicle replacement insurance and why could it be even better for you?

We already know that return to invoice gap insurance protects the invoice price when your vehicle is written off. In short it pays the difference between your own motor insurance companies valuation on the day it is written off and the original invoice price you paid ( less your road fund) . So between the two insurance companies you are now effectively getting the original purchase back you paid.

From this you can clear any finance and the chunk in the middle the deposit , the equity you have accrued is yours to do with as you see fit.

So what could be better than getting all you money back?

Well simply getting all your money back is no guarantee that you will be able to buy the same type of vehicle again. After all prices increase, cost of labour parts and transportation as well as variance in rates of VAT means that over a period of time it is more than likely to cost you more to buy the same type of vehicle.

This is exactly where vehicle replacement insurance can help.

Vehicle replacement instead of just protecting the invoice price has an inflation proof aspect. This is because vehicle replacement pays the difference between your vehicles valuation on the day it is written off and the amount of money you would need to spend to buy another vehicle the same age , mileage and specification as your was on the day you drove it home from the dealership.

Just like return to invoice , vehicle replacement insurance that you are paid the funds, but in this case you get the back the deposit you paid, the equity you have accrued as well as the inflationary increase in the cost of the vehicle.

So to summaries vehicle replacement is almost like return to invoice but it has the additional benefit of having an inflationary increase aspect attached.

 

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One Response to “Why should you think about Vehicle Replacement Insurance?”

  1. [...] If your policy pays the difference between your vehicles valuation and the amount your need to spend to buy another vehicle the same age mileage and condition as your was on the day that you drove it home from the dealership then it is form of vehicle replacement insurance. [...]

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