GAP Insurance

How do I work out how much GAP insurance I might need?

If the vehicle is on a lease (contract hire) you should check with the leasing company what their charges are if you need to settle the contract early. There are many companies who will charge around 50-60% of outstanding rentals, while some others will charge you the full 100%. For cars bought, as a rough guide you could assume that a vehicle 2 years old will be worth approximately 65% of its original value, for 3 years old 45-50% of the value and for 4 years you could assume 35-45%. This is a guide based both on average wear and tear and average mileage. You need enough GAP insurance to cover the difference between the estimated value and the replacement/invoice cost.

05/12/2011 10:00:32 Jo