First the good news!
If your motor insurer provides ‘new for old’ cover in the first year, we have a deferred Gap Insurance option available at no extra cost. So, if you plan to keep your vehicle for 4 years – you only need to purchase a 3 year Gap Insurance policy and ask to have it start in 12 months time on the vehicle's first birthday!
Now, the not so good news…
Whilst a Gap Insurance policy start date can be deferred – the purchase of the policy cannot, because Gap Insurance policies with the exception of Agreed Value Gap Insurance must be purchased within 180 days of the vehicle delivery.
For those who purchase a Finance & Contract Hire Gap Insurance policy, this type of Gap Insurance cannot be deferred.
Deferring may leave you with risk.
Deferring your Gap Insurance policy can leave you with risks and there are some vitally important things you need to do and consider before choosing to defer. Some motor insurers do not clearly or fully define the phrase ‘new for old’ and it is often very different to what you the policyholder expects. Here are a few of many examples we have seen from some major insurance companies;
- If the vehicle cannot be sourced from dealer stock and delivered within 3-6 weeks the policy will only pay ‘market value’ at time of write off – and that is NOT new for old,
- Some insurers have been known to give ‘new for old’ on the basic vehicle list price which therefore excludes the cost of factory fitted options and dealer fitted accessories,
- If the vehicle is stolen only ‘market value’ applies, therefore new for old cover will not apply to theft.
- If your motor insurance policy is due for renewal in that first year, will your motor insurer honour the ‘new for old’ arrangement? If your motor insurance is due for renewal in that year and you intend to ‘shop’ around for a cheaper offer, do bear in mind the new insurer may not honour the ‘new for old’ because the vehicle was not insured with them from new.
- If you are financing, will your motor insurer clear an outstanding finance balance if the balance exceeds the purchase price of the vehicle in that first year?
Seek clarification from your motor insurer.
Before considering deferring your policy, we would encourage you to seek clarification from your motor insurer to enable you to fully understand what they will and will not pay for in the event of a claim in the first year – as this could influence your decision to defer your Gap Insurance.
Assuming you are happy with your insurers commitment to provide first year ‘new for old’ cover and you will not be changing insurers in that first year, you can take advantage of a Gap Insurance deferment. No matter where you buy, Return To Invoice and Vehicle Replacement Gap Insurance must be purchased within 180 days of delivery, and you may then tell us when you would like your policy to start.
During the online buying process, you will need to confirm your required Gap Insurance policy start date. If you choose to defer your Gap Insurance policy, you may enter any date up to and including the vehicle's first birthday.