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A Total loss Gap Guide to Drama Free Contract Hire Gap insurance

Thursday 10th August 2017 11:29:31

If you are buying a vehicle on contract hire you will of most likely been offered gap insurance. 


If you thought buying your contract hire vehicle was difficult then wait until you start to think about the gap coverage.


The issue is that each provider will tell you that you need to protect a certain aspect of the financial agreement. Only their's will protect x or Y or Z.


 Ok lets strip it back and show you what we mean. 


If your vehicle is written off your own insurance company will offer your lease or contract hire company the value fo your vehicle on the day. Then depending on which lease company you are with they will tell / lead you to believe that you then need to make sure that you protect ....

  • the outstanding rentals
  • the difference in market value
  • the difference between the settlement and the purchase price.
  • early termination charges.... the list goes on and each provider calls it something completely different.


The reality is so simple it is such a shame that providers make it overtly complicated let us show you what we mean.


For your lease company you have not bought a car instead you have bought a lump of cash.


For them it makes no difference if you pay your monthly payments and then give them an asset which they are pre set the value of, or if you buy yourself out of the contract in 12 months time or if unfortunately you write your vehicle off. They simply want to get their money back.


So if your vehicle is written off your own motor insurance company will give your lease / contract hire company the value of your vehicle. Our claims team will liaise with them to ensure that they are offering a genuine valuation and agree settlement between themselves.  Your total loss policy will then pay the difference between what ever the settlement is and the amount that you need to pay to be able to walk away from your old agreement. ( this would exclude an late payment charges or arrears ). After all it is the same chunk of money it could be outstanding payments or differences in market value but it will never be split out and instead will simply show as one figure. E.g. amount outstanding = x. 


This means that providing you are up to date with your payments and have no late payment charges you can walk away with no further financial responsibility to your old car regardless of what acronym your lease company used to describe it. 


After all if we are completely brutally honest we do know what you car will be worth, we can use historical information, trends and predictions, but they are just that, predictions. Equally we don't know how many payments you will have outstanding. We can no guarantee to the penny what this difference will be so we don't put a limit on it and our policies are in fact open ended. 


If you decided to protect your initial rental this will be issued back to you and then you can move on an buy another vehicle with we hope another gap insurance policy from


Why not click or call and see just how easy and simple protecting your contract hire vehicle with gap insurance genuinely can be. 

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