The last few years haven’t been a great time financially for many motorists. The seemingly never ending rise in the cost of petrol, road tax increases and the extortionate cost of servicing and repairs have hit us all hard. As if all this wasn’t enough, a new survey has revealed that despite the fact that car insurance premiums are also expected to increase sharply this year British motorists are risking losing around £86bn due to inadequate insurance cover.
The survey, called ‘Mind The GAP’ and conducted jointly between online GAP insurance provider ALA and YouGov, has shown that 77% of UK motorists are risking being severely financially caught out in the event of a theft or write off. This is because most motorists are not protecting themselves against any shortfall in insurance payouts.
As many of you will already know, GAP insurance is a way of protecting yourself against the insurance shortfall which arises due to insurance companies only paying out the market value of a vehicle in the event of a total write off. Depreciation means that this payout will not cover the remaining finance, the invoice cost of the vehicle or the cost of getting a similar replacement. Purchasing GAP insurance will solve this problem and gives motorists extra piece of mind.
The poll, which involved 2055 adults, also found the following:
• One in ten people said that they have had a car written off in the past
• About one in twenty (6%) said that they have had a vehicle stolen in the past
• One in twenty said that they had purchased their current vehicle with a personal loan
• 11% of people had bought their current vehicle on hire purchase
• 30% of 25-34 year olds have bought their car with either a personal loan or on hire purchase
If you match these figures with the fact that only 2% of respondents said that they had shopped around for GAP insurance and only half of them even knew what it was it suggests that a huge amount of people are vulnerable to this problem. Around 24 million people in fact.
Compared to other types of vehicle insurance GAP insurance is relatively cheap. GAP insurance policies tend to be up to 75% cheaper if you purchase online rather than purchasing from a car dealer and can start from around £75 for a three year policy. If you don’t want to get caught out, it might be something worth looking into.