What is Return to Invoice Gap Insurance?
May 23, 2013

What is Return to Invoice Gap Insurance?

 

It is more than likely that you have recently purchased a vehicle from your local dealership and will have been introduced to Return to Invoice Gap Insurance. You may have understood what Return to Invoice Gap Insurance was when explained within the dealership, but now you wish to find out more online?

 

Return to Invoice Gap Insurance is said by many in the industry to be the most popular level of cover available, However, we at Easy Gap believe that this is not through popularity alone but more through the exposure the level of cover receives through dealership networks. Other levels of cover such as Finance Gap Insurance and Vehicle Replacement Insurance will not receive such exposure within dealership networks.

 

Return to Invoice Gap Insurance is said to have the highest level of exposure within dealerships due to its eligibility for various levels of purchase methods. If you have purchased your car through the form of a financial agreement such as PCP or straight out with cash then you will be able to consider the Return to Invoice Gap Insurance policy. However, if you do not have the option to own the vehicle at the end of the agreement then you may be ineligible for this level of cover.

 

Return to Invoice Gap Insurance Explained

 

Return to Invoice Gap Insurance will cover the difference between the market value of your vehicle on the day it was written off or stolen and the original invoice price of which you paid for the vehicle. As you may already be aware, the market value of your vehicle will depreciate over the course of ownership and market trade experts predict that the average vehicle will lose up to 50% of its original value within three years of ownership.

 

How it works …

 

For Example, you purchase a brand new Ford Fiesta for somewhere in the region of £15,845 in May 2013 and three years down the line in June 2016 you write the vehicle off. According to both current and past depreciation rates your Ford Fiesta model is believed to be worth somewhere in the region of £6,775. This would leave a massive financial gap from the price you paid, a gap that is as wide as £9,070.

 

Return to Invoice Gap Insurance would simply cover the difference between the market value of your vehicle on the day it was written off (£6,775) and the invoice price you paid (£15,845). That means that with a Return to Invoice Gap Insurance policy you would be able to bridge the financial gap of £9,070 and be returned to your original invoice price of which you paid for the vehicle.

 

In this example, in order for you to be returned to your original invoice price you must have chosen a claim limit of £10,000. Your claim limit is the maximum amount of which you can claim for on your Gap Insurance policy. We at Easy Gap would like to urge you to choose the correct claim limit which would allow the policy to achieve its full potential.

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