Choosing Return to Invoice or Vehicle Replacement Insurance

It is fair to say that if we had to choose which two types of gap insurance cause the most confusion when compared to each other, it is RTI and VRI Gap Insurance. It is also fair to say that these two types of cover are the most closely related we offer, and that they are also the most popular forms we sell.

What are the differences?

The advantages and disadvantages of each and which circumstances may mean one style is more appropriate than the other.

VRI or RTI Gap Insurance?

Return to Invoice Gap Insurance
is the most common style of gap insurance offered by motor dealers in the UK. Why is this? Well firstly it has been available for quite some  time, and secondly it is pretty easy to understand and explain to a customer.

The basis of the cover is that if your vehicle is written off, it will cover between the market value of the vehicle at that time and the original invoice price you paid for the vehicle. This means that if you add the settlement from your motor insurer to the settlement from the gap insurance policy, you will get your original purchase price back.

Sounds simple enough? So what are the downsides to this type of cover?

Discount - If you have secured a discount on the vehicle then this may not be repeated if you had to replace it. If you have RTI Gap Insurance than you can only cover the discounted price, nothing more.

Manufacturers increased costs - If the manufacturer changes the model or simply takes into account inflation, the cost of the equivalent model does tend to rise over time. RTI will cover the initial investment NOT the increased costs associated with replacing the vehicle.

Vehicle Replacement Insurance as an alternative

The normal alternative to return to invoice gap insurance is VRI Gap Insurance, or Vehicle Replacement Insurance as it is also known. The basis of this cover is to protect between the vehicle market value when it is written off and the cost of replacing the vehicle with the replacement model.

So if you buy a 1 year old Ford Focus for £13,000 and you look to replace it 4 years later, the equivalent 1 year old model is now £15,000, then it is the £15,000 figure that VRI can return to you. This would be £2,000 higher than a return to invoice policy would have provided.

Advantages and disadvantages of Vehicle Replacement Insurance


Well one difficultly comes directly from the strength of the cover. By protecting to the equivalent replacement cost, we are looking to cover to a figure no one really knows. This makes picking a claim limit for the policy quite difficult. However, with the difference between the claim limits being quite small in price, it may make the decision a little easier for you.

In theory, it could actually cost less to replace an equivalent vehicle in the future, than the purchase price today. If this was the case then VRI could provide a lower protection than RTI. However, in practice, and common sense would confirm this, it is unlikely that this would ever happen.

The knowledge, or lack of, Vehicle Replacement Insurance amongst UK consumers can put some people off buying it. Very few motor dealers will offer this as an alternative, even though in many cases it could offer more comprehensive cover for consumers.

So there you have it, our brief rundown on the differences between Vehicle Replacement Insurance and Return to Invoice. Of course of you wish to discuss this further please call our customer services team on 0800 195 4926.