Quote:
Originally Posted by silverbmwz3
"as your insurers would replace the car with new"
Not necessarily...worth checking policy wording. I found mine wouldn't, or if they did, wouldn't include the 5k+ of options in that. I found one that would. Many will just give "market value" which even in first year is a considerable chunk less than new cost.
I hadn't thought of the excess in the first year, but then it is probably a money swap pound for pound with the amount of the premium they would charge for Gap insurance.
You mention risk a few times, but this doesn't seem to be about protecting risk to me. "I'd like to protect against the risk of my 3 year old car being stolen/written off by buying a policy that replaces it with a new one" ?! FULLY COMP INSURANCE is about risk, this is about getting you to a better position than you were in when you had the accident/theft. Generally insurance doesn't do "betterment" but these policies seem to be just that.
To me they are a bit like extended warranties.... generally don't touch them with a barge pole as they are a money making scheme.
|
I still agree
Your insurers will give you a 'market value' for your car.
GAP insurance is founded on a 'false' premise of a car as an asset with a fixed value.
So you buy a £30K car and if it's written off at any stage during the term of the policy you get a £30K to replace it.
However the reality is that a car depreciates from the moment you buy it. If you ran your personal life as you would a business, then you wouldn't have it on your balance sheet at invoice value. Instead you would be writing it down on a regular basis.
If you get £30K insurance settlement for a car with a 'balance sheet' value of £20K then you are technically adding £10k to your 'profit and loss' account.
Return to Invoice cover is more like a lottery that pays out if your car is written off than genuine insurance. It's also expensive.
It's nothing to do with tolerance to risk, because there is no true financial risk without gap insurance.
However, it's not as bad as extended warranties ... which really make my blood boil.