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0800 195 4926

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What's special about Lease Hire | Contract Hire Gap Insurance?

Can you buy Return to Invoice Gap Insurance for a lease vehicle or is there a special type?

Gap Insurance is always about eligibility. The policies themselves are very flexible and can offer not just peace of mind, but also exceptional value for money. But the big question is, are you eligible. The most well known form of GAP is Return to Invoice and therefore you may believe that if you need a form of GAP protection it is Return to Invoice that you need. However, this may not be the case. If you have taken the vehicle on a form of lease or contract hire, where you have no option to own, there will be a specialist policy for you. This policy is a Contract Hire|Lease Hire Gap Insurance policy. 

Even before you have got a quote, bought a policy or even spoken to a member of the team, at Total Loss Gap one of our primary objectives is to make sure that when and if, you ever need to make a claim, that your Gap Insurance policy does exactly what you expect it to. Therefore, from the outset we are trying to ensure that you have the correct policy and that you are protected to the max.

The most important question is, do you have the option to own the vehicle at the end of the finance agreement? This is because, if the vehicle is not yours, can never be yours, then we cannot protect the invoice or replacement cost. Instead, we are simply protecting any financial shortfall. 

How does Contract Hire|Lease Hire Gap work?

If your vehicle is declared a total loss, your own insurance company will pay your lease company the value of your vehicle on that day. Your Gap Insurance company will than pay the financial shortfall. Many different suppliers call this shortfall a number of different things, or even a combination of any of the below ...

  • forward rentals, 
  • back rentals,
  • early settlement charges,
  • or differences in market value.

Not to worry, it is the same thing and exactly what we clear with Contract Hire and Lease Hire Gap should the worst happen. Simply put, providing that your own insurance company agrees to settle and providing that there are no late payment charges or arrears, you can simply walk away with no further financial obligation. It is in fact as if your Lease Hire / Contract Hire agreement simply finished early. 

From our perspective, if you manage to answer the questions incorrectly and purchase the Combined Return to Invoice & Vehicle Replacement GAP policy, the policy would perform in a similar way anyway as it could only ever protect your liability due to the fact that you never have the option to own the vehicle. The issue is that you would be paying more for your Gap Insurance policy than you really need to, as well as risking the policy not performing as you have selected the incorrect policy. Our system is designed to ask simple and straight forward questions and providing you answer them honestly, you will be shown the most suitable policy.

What is the difference in price between a Combined GAP policy and a Contract Hire|Lease Hire Gap Insurance?

Let's say that you have purchased a Nissan Juke for £16,295 on a three-year contract hire agreement with no option to own.

You are paying £143 per month.

If you mistakenly purchased a Combined Return to Invoice & Vehicle Replacement policy, it would currently cost you £112.34.

If you instead purchased the correct policy, a Contract Hire | Lease Hire Gap Insurance, it would cost just £82.92.

That means that you would in effect be paying £29.42 more than you genuinely need to and there would be no difference in the settlement. If anything you risk the policy not performing as it should do, whilst also not been given the opportunity to protect your initial rental or deposit.