Buy Gap Insurance for Skoda

What is Vehicle replacement insurance and what can it do to help protect youand your Skoda?

No insurance can ever stop your Skoda from being involved in an a accident and no insurance can ever stop your Skoda from being stolen. Instead it can help protect you financially should the worst happens and your Skoda join the estimated 600,000 other vehicles written off in the UK each year alone.

Vehicle replacement insurance or VRI for short is especially good for Skoda as it protects not just a physically amount that you have paid but instead a standard of vehicle.

For example if you have just bought a new Skoda Octavia Estate on the special VAT free deal that is nationally available at the moment you will have paid considerable less than the list price. This means that even if you had wisely chosen to protect your Skoda with a form of return to invoice gap insurance and your Octavia was written off in two years time, getting the invoice price back would still leave a massive shortfall.

Vehicle replacement pays the difference between your Skoda's valuation on the day it was written off and the amount that you would need to pay to buy another Skoda the same, age , mileage and condition as yours was on the day that you first drove it home.

After all all cars lose money even your Skoda and motor experts predict that the average vehicle with average usage will lose up to 50% and even 60% within the first three years alone. Add the natural increases of inflation and it is easy to see how even taking what you first thought was adequate over in the form of return to invoice gap insurance may not be enough.

What if Skoda withdraw the special VAT deals?

What if transportation costs, exchange rates and manufacturing costs means that the price of an equivalent model is higher?

What about labor costs and VAT fluctuations as well as manufacture increases?

Combine all these factors together and it means that chances are if you had to replace your Skoda in say two, three of even four years time you would have to pay considerable more.

By protecting your Skoda with vehicle replacement insurance you can rest assured that should the un-thinkable happen then at least the financial worry is taken away.

What is return to invoice Gap insurance and why should you protect your Skoda with it?

Return to invoice gap insurance is a very simple form of protection to understand. Essentially if your Skoda is written off it pays the difference between your Skoda's valuation and the original invoice price you paid or the amount of money outstanding on finance (linked to the vehicle ) which ever is the higher amount.

Easy! You now have the full purchase price you paid back ( less road fund as you can claim this back from DVLA), clear any finance if necessary and the balance, the deposit you paid, any equity you have is yours to do with as you see fit.

Simple!

Your own motor insurance company is responsible for insuring you to drive on the road, to cover you for minor accidents and is in fact a legal requirement. They also ensure that if you are involved in an accident that does not result in your Skoda being written off that any repairs are paid for.

Gap insurance is a very specific insurance as it only ever comes into action if your Skoda is written off. 

Don't forget that your own motor insurance company are only legally obliged to pay you what your Skoda is worth on the day it was written off, this is sometimes called the market value. Your gap insurance covers the rest.

All cars lose value over time after all you would not want to pay full list price for a three year old Skoda Yeti instead you would want to pay a lot less. With motor experts predicting that the average vehicle( your Skoda included ) can loose between 50 % and up to 65 % of its orginial value within the first three years alone.

As fantastic as your Skoda is rates of depreciation is not something that any new owner likes to consider but in order for you to make real informed choices you need to be aware so that you can fully understand your financial risks.

With on line gap insurance prices for your Skoda form as little as £34,00 for one years cover why not click or call a member of the team and explore your gap insurance options?

What can Finance and contract hire gap insurance do for you and your Skoda?

Finance gap insurance is the most basic level of gap insurance you can buy so if you have not bought your Skoda on a form of contract hire of have financed your Skoda on a personal loan or been fortunate enough to have a large deposit please consider other forms of gap insurance protection.

Why is this?

This is because finance and contract hire gap insurance is simply designed to pay the difference between your Skoda's valuation on the day it is written off and simply clear your outstanding financial liability or in the case on contract hire rentals.

After all with no form of protection if your Skoda is written off you face the terrible protect of having no car, and having to use what ever savings you have to clear your finance.

Lets look at a real life example, for illustration purposes lets say that you have just bought a Skoda Yeti Elegance 2.0 Tdi and paid £17622.70.

We have just searched the internet and the best deal we could find was with a deposit of £2038 for 48 months.

This meant a monthly payment of £248.66 per month based on £10,000 miles per year with an optional final payment of £6545 at an APR of 6.5%.  The Skoda Yeti is an amazing car and has won both public and motor trade accolades but over time just like any other vehicle it will loose value.

For illustration purposes lets say that in two years time your Skoda Yeti is written off. The exact way in which it was written off does not matter except to say that your own insurance company are happy to settle.

We know that your own insurance company are legally obliged to offer you what ever the market value for your Yeti is at the time and while no -one can ever categorically promise to know exactly what any car will be worth at the end of a set period of time, What car use current rates of depriciation and public trends to estimate what it may be worth.

According to What car you would of paid in the region of £20,380 for your Skoda Yeti Elegance 2.0 TDI CR 110 so you really did get a good deal, but by the end of year one this will of dropped to £13324, the second year £10975, the third year £9000 and the fourth year £7700.

Again for illustration purposes lets say that What Car have got it completely right and your Yeti is worth exactly what they predicted, therefore your motor insurance company offer you £10975.

Your finance company then send you a settlement letter which based on the amount of payments you have left and the optional final payment would be in the region of £12542.84. You may get a very small rebate for settling early but the interest rate you had was fantastic so this would be nominal.

This means that you are now left in the terrible position of having no car and worse still having to find £1567.84 just to clear the finance on your old car. Don't forget that your agreement does not finish just because your Skoda is gone and that you are still legally financially labile.

This is exactly where finance and contract hire gap insurance can help. While it can not ever stop your Skoda from being written off it can make sure that if it ever is that you can walk away with no further financial liability. This is because finance and contract hire gap insurance would simply pay the difference between your sodas' valuation on the day it is written off and the amount of your financial liability. it would also pay £250 towards your own motor insurance excess.

Yes finance and contract hire gap insurance is just like any other insurance it is all about the risk of something happening, so with an estimated 600,000 vehicles written off in the UK each year and prices for your koda from as little as £34 is it really a risk that you want to take?

Skoda Auto is a Czech Republican auto mobile manufacturer and a subsidiary of the pioneer German auto maker, Volkswagen Group.

Skoda holds an interesting history which dates back to the 1890’s.  In 1894, Vaclav Klement, a book seller in what was then known as Czechoslovakia began the search to repair his bicycle. Without any success in his country, he decided to send the bicycle to the German based manufacturer, along with a letter kindly asking if they could repair his bicycle. Vaclav  surprisingly received a rejecting reply stating “‘If you would like an answer to your inquiry, you should try writing in a language we can understand”.

Vaclav, obviously furious and frustrated, decided to open his own bicycle repair shop, called ‘Laurin-Klement’, along with his partner Vaclav Laurin. This paved the way for the creation of what is now known Skoda Auto. The company expanded to motorcycles in 1899 and built their first car in 1905.

The Skoda Brand is born

The first Skoda car was the Voiturette A which was a huge success throughout the Czech nation. At the outbreak of World War One, the thriving company had a extensive product portfolio ranging from trucks, buses, aircraft engines, agriculture machinery and as a result, needed a extra partner who would invest and help modernized the growing company. This partner would be, Skoda Works, a Czechoslovakian arms manufacturer.

Skoda would experience great success post World War Two, however as the result of the fall of communism and the damaging consequences it had on the eastern bloc, Skoda began another quest too search for partner with the aim for additional investment to capture its success pre 1980.

A battle for the brand

Two European auto makers Renault and Volkswagen began a fierce competition over who would acquire Skoda which would eventually end with Volkswagen, who began its share with a 30% stake in 1991, which grew to 75% in 1995 and then eventually taking the company over in 2000. Volkswagen would perform a huge transformation of Skoda’s image and capture its success once again, expanding its products throughout the world.

The famous Skoda logo represents a ‘three winged arrow’, or as many people would argue, a woodpecker. The wing is seen to represent Skoda’s process to technology in 1926.

Such has been the rise in fortunes for the brand, many awards have been won by Skoda in the last few years. The vehicles are held in high esteem by their owners.

Skoda’s current product portfolio currently includes the Citigo, Fabia, Roomster, Rapid, Octavia, Superb and the Yeti models.

Defaqto is an independent financial research and software company that specialises in rating, comparing and analysing financial products and funds. EasyGap are proud to announce that the following products: Vehicle Replacement Gap Insurance, Return to Invoice Gap Insurance and Finance and Contract Hire Gap Insurance have a Defaqto 5 Star Rating.