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Combined Return to Invoice GAP insurance is a nice easy level of cover to understand, the reason for this, is that you already have an invoice for your vehicle, so you know in advance, exactly how much you are protecting.
In order to buy Return to Invoice GAP from EasyGAP you must fit certain criteria, including:
Many vehicle purchases are completed by taking out some form of finance on the vehicle. If you suffer a total loss then what happens to the finance very much depends on what type of finance you had in place. If the finance was a Hire Purchase, PCP or anything that ties the vehicle to the finance agreement then you will normally be required to pay off the finance at the time the vehicle is 'written off'.
If you have paid for the vehicle using a personal loan then you may not need to pay off the finance. Depending on the terms and conditions of the loan, you may be able to keep the loan running and simply use the full settlement to buy a new car.
If you do pay off the finance settlement then the remainder of the settlement is yours.
So if the invoice price was £15,000 (and you get this back between the motor insurer and the RTI GAP Insurance), the finance settlement is £8,000 then this will leave you with £7,000 as a deposit for a new vehicle.
Return to Invoice GAP is suitable whether you pay cash or have the vehicle on finance. The only difference when you pay cash is that you have no financial settlement to pay off if the vehicle is written off. This means, in the event of a claim, you get the entire invoice price back in full.
This is one of the most misunderstood aspects of getting Return to Invoice GAP, and one that we are asked time and time again. So what does your invoice price mean?
Simply it is the net price you have paid for the vehicle. This can include any cash you have paid, any equity from a part exchange vehicle and any initial amount you have financed.
What is not part of your invoice price is any discount that you have received, any interest you will pay as part of the finance agreement or any negative equity that has come across from your part exchange vehicle and been added to your new finance agreement.
To be clear, this situation would be unlikely. This may happen if you borrow the full purchase price of the vehicle, with no equity or deposit, and in the first month of your agreement, you may owe more on the finance than the invoice price paid. This is because you have made no payments and some interest may have been added.
If your vehicle was written off at that point then the RTI GAP policy will top up the motor insurers settlement to the finance settlement. This is if the RTI policy is 'combined' so will pay to the higher or either the finance settlement or the invoice price you paid.
EasyGAP can provide cover for 2 to 4-year policy duration for vehicles up to £50,000 invoice price. For vehicles up to £25,000 then the maximum claim limit available is the invoice price you paid. For vehicles over £25,000 then the maximum claim limit available is £25,000.