Negative Equity Gap vs Finance Gap Insurance
At EasyGap.co.uk we can offer you a number of Gap Insurance options, in fact there are around 10 on the site to choose from. Mostly there is an easy distinction between the levels of cover, for example between Return to Invoice and Vehicle Replacement Insurance. However, sometimes the differences between levels of cover can be very slight, and this can cause some confusion. One such case is between the difference between 'Negative Equity Gap Insurance' and Finance Gap Insurance
Negative Equity Gap vs Finance Gap
Finance Gap Insurance simply will cover between the vehicle market value and the outstanding settlement on your hire purchase or lease agreement. In other words, if you owe more on the loan settlement than the vehicle is worth at the time it is written off, then Finance Gap Insurance will look to bridge that gap.
It is very commonly offered by motor dealers, and is possibly the best known type of guaranteed asset protection because it has been around for many years.
Negative Equity Gap Insurance is basically Finance Gap Insurance with one very important difference, and it regards any vehicle you have part exchanged into the deal.
If your old vehicle had a finance settlement on it, which was higher than the vehicle was worth when you traded it in, then you were in 'negative equity' on the vehicle. If this 'negative equity' has been added to the hire purchase on the new vehicle, then you may have borrowed an amount in excess of the purchase price of the new vehicle.
Negative Equity Gap Insurance will pay between the vehicle market value and the outstanding finance settlement INCLUDING up to £5,000 of negative equity carried forward from your previous finance settlement, added to your current finance.
So that is the difference, you can cover negative equity that has been added to your new deal from your old vehicle ONLY with Negative Equity Gap Insurance.
Simply click for a quote and on the question regarding the new vehicle purchase method, if you have negative equity carried forward, then select the option regarding this. If you have no negative equity, even if you have borrowed the full purchase price on your new vehicle, then you will not need to select negative equity gap insurance.
If you have any questions regarding this or any other aspect, please give us a ring. EasyGap makes Gap Insurance easy for you!