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GAP Insurance for Contract Hire

GaryP Jan 5, 2018

  1. GaryP

    GaryP Active Member MQB Platform

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    Hi

    Has anyone taken out a GAP Insurance policy recently, to cover the Monthly Payments that your Lease/Finance Company may require you to pay in the event that your Contract Hire Car is written off/stolen etc?

    My understanding is that You/I would be liable to pay the remaining Monthly Payments in such a scenario - plus, if this happened in the first few months, you'd probably quite like to get some of your Initial Payment back so financially your are not too out of pocket and have some deposit back to start all over again.

    Any recommendations/guidance gladly received!

    Thanks.
     
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  3. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    You don’t need it for first year usually as your fully comp insurance with replace new for Old in the first year.
     
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  4. GaryP

    GaryP Active Member MQB Platform

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    Ok, will look in to that one. Thanks!
     
  5. GaryP

    GaryP Active Member MQB Platform

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    Admiral does not provide New Car Replacement...! Checking out a few others now. Priviledge look like they do.
     
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  6. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    They definitely do. That’s who I’m with.
     
  7. cuke2u

    cuke2u Well-Known Member TFSI Owners Group saloon Audi A4 S-line owners group

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    Direct Line also provide this service...
     
  8. GaryP

    GaryP Active Member MQB Platform

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    Hmm - the lady from Admiral who I spoke to clearly stated not. Also, the few I have checked so far most of them do not do New Car Replacement if the car is not effectively in YOUR name (Registered Owner/Keeper) and is under a Contract Hire.

    I chatted to Endsleigh online and the lady there confirmed they did, and that on the quote I should state that I AM the Registered Owner/Keeper then its on the insurance documents and that this isnt something that they take in to consideration anyway. The wording in the Policy Document would state otherwise though!

    Minefield!!

    Think if I find a cheap GAP Insurance policy I will just take it and get rid of the risk, or at least 99% of it! It will not be Dealer supplied though as they are talking in the £300+ region!
     
  9. GaryP

    GaryP Active Member MQB Platform

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    Ok - I take it back - just checked Policy Summary on an Admiral Quote and they do New Car Replacement - but it does also state the following:

    New car replacement: If your vehicle is 12 months old or less, you are the first registered keeper and it is written off or stolen and unrecovered we’ll replace it with one of the same make, model and specification if available in the UK or pay the market value at the time of the loss.

    So - would you say you are the 1st Registered Keeper? From memory you're leasing your car @A4AvantBlackEdition ....?

    I'm not sure I dare take the risk of policy wording against common sense.
     
  10. GaryP

    GaryP Active Member MQB Platform

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    So just found this clause wording with M&S insurance (although they are very expensive!!):

    New car benefit
    The insurer will replace the car with one of the same make, model and specification if;
    •the loss or damage happens within twelve months from the date the car was first registered; and
    •you, or your partner, are the first and only registered keeper of the car (or the second registered keeper if the first registered keeper is the manufacturer or supplying dealer and the delivery mileage is under 250 miles); and
    • you, or your partner, have owned the car (or it has been hired to you, or your partner, under a hire purchase or leasing agreement) since it was first registered as new (or you are the second owner if the first owner is the manufacturer or supplying dealer and the delivery mileage is under 250 miles);
    and
    •the cost of repair is valued at more than 60% of the cost of buying an identical new car at the time of the loss or damage (based on the United Kingdom
    list price); and
    • the car was supplied as new from within the territorial limits.

    In these circumstances, if you ask the insurer to, they will replace the car (and pay reasonable delivery charges) with a new car of the same make, model and specification.

    Best policy wording so far for a Contract Hire car scenario.
     
  11. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    I was referring to Privilege when I said they definitely do. Privilege definitely do new for old in the first year.
     
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  13. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    When I took out the policy I told them I was neither the registered owner or keeper (as Audi finance was) and I also asked them to confirm that it was new for old and that GAP insurance wasn’t needed. They confirmed that it was all fine and it didn’t matter that I wasn’t registered owner/keeper, they still honor the new for old if it was written off within the first year.
     
  14. GaryP

    GaryP Active Member MQB Platform

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    You did it over the phone?

    Are you on a Contract Hire arrangement with Audi?

    Just ran a GAP quote that targets Contract Hire and it was around 80-100 depending on whether you wanted to protect your Initial Deposit or not. 2yrs, 205 a month contract hire payments, 3k initial, £36k value of car. Not bad if wanting total peace of mind. Will speak to a couple more insurers on phone before making a decision.
     
  15. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    I got the initial insurance quote online, then called them and asked them to match it and also clarify it was ok with me not being registered owner/keeper and also confirm the new for old. I wanted to make sure, should the worst happen, that I was covered. Yes. Personal contract lease with Audi. Insurance through privilege. Who were the cheapest, yet a good cover.
     
    GaryP likes this.
  16. cjp2k

    cjp2k Active Member Team Daytona saloon Audi A4 S-line owners group

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    I have first hand experience of new for old cover...I wrote my 17 plate off just before Christmas

    I am with aviva and the sourced me a new car....however the car must be registered to you and you either own the car or will at the end of the finance..eg HP or PCP

    I was asked twice if the car was on contract hire and if it had been they don’t offer new for old

    The car must also be brand new and not pre reg etc

    The only issue I had was the car must be identical spec... they would happily factory order one but would of been 12 weeks

    They sourced me a car with the 190 engine rather than 150 with the same options and I had to pay the difference

    They also had to get agreement from Audi finance to make sure they were happy with the car.

    They just transferred the finance to the replacement car
     
  17. cuke2u

    cuke2u Well-Known Member TFSI Owners Group saloon Audi A4 S-line owners group

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    That's good news about the finance, seems they are quite amenable...
     
  18. SRB93

    SRB93 S5 B9 Coupe - Glacier White Team Glacier Team V6 Audi S5 Coupe

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    Can confirm for anyone wanting to go with Aviva, that they will do this.
     
    GaryP likes this.
  19. GaryP

    GaryP Active Member MQB Platform

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    Oh, hope everyone was OK! Writing off a brand new car suggests large impact to me (or you ended up in a deep river or something like that!!). Glad to hear it all got sorted out.
     
  20. SRB93

    SRB93 S5 B9 Coupe - Glacier White Team Glacier Team V6 Audi S5 Coupe

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    See, I asked Aviva and they said I was covered as the Registered Keeper of the vehicle under Contract Hire
     
  21. EDRIAT

    EDRIAT Member

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    Not all motor insurers who offer new-for-old cover in the first year of "ownership" will permit that cover for a vehicle which is the subject of a Contract Hire Agreement. The key is that most expect you to be the Registered Keeper of the vehicle which, is something that can only be evidenced by way of the V5 Registration Document. If it's a Contract/Lease Hire Agreement your name will never appear on the V5 Registration Document - in fact you'll probably never see the V5 document as it will remain with the finance company.

    If you have a motor insurer telling you to indicate something false on the application process in order to get something that you wouldn't otherwise be entitled to according to the policy wordings (e.g. saying that you are the registered keeper when you're not), I'd be asking for a copy of that call recording immediately (and/or for the same instruction to be given to me in writing) to ensure that I have it to hand for any future claim that might arise.

    Separately though, not all Contract Hire Agreements require GAP insurance...

    I wrote off a leased Volvo V40 in December 2014. The shortfall between what my motor insurance paid out and what Volvo Car Finance stated was my settlement figure was something like £3,800 but the terms of my lease agreement (which was ultimately with LEX) was such that I was allowed to walk away without having to pay any of it. The downside though is that I wasn't able to get any of my initial rental back (which a GAP insurance policy with Initial Payment Cover would have covered). Still... it could have been worse.

    Generally speaking... If your leased vehicle is written off, your motor insurer will declare what they think your vehicle was worth at the time of incident (this being the amount that they'll be paying to the finance company). Separately, the finance company will calculate the settlement figure of the lease agreement which will normally be a combination of:
    • What they think your car was worth, plus
    • The sum of the rentals that you would have had to pay for the rest of the agreement had the car not been written off, plus
    • Any arrears, excess mileage and maintenance charges (note almost all GAP insurance policies will NOT cover these fees), plus
    • Often some sort of administration fee for wrapping up the agreement, less
    • Sometimes but not always, there'll be a discount for settling early.
    The figure paid out by your motor insurer will then either be higher or lower than the figure arrived at by the finance company.

    If it's lower, this shortfall is what most people would expect to be liable for (or which a GAP insurance policy would cover - albeit excluding excess mileage fees, arrears and maintenance) however, whilst some finance companies would have you liable for ALL of such shortfall, some would only have you liable for SOME of the shortfall whilst others (as I personally experienced) would not hold you liable for any of it.

    Thus... it's prudent to check the terms of your lease agreement specifically to see if you're likely to need GAP insurance at all.

    HTH
     
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  22. GaryP

    GaryP Active Member MQB Platform

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    Just been on the phone with Priveledge and they confirmed that their New Replacement Car policy DOES NOT apply to Leased/Contract Hire cars. The agent reckoned the policy changed a few/couple of months ago.

    Not trying to say you are not covered, just relaying what I was told on the phone there just now. Maybe you got your policy through before they changed their T&C's.
     
  23. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    Interesting.

    I will be in the phone to confirm that ASAP.

    I’ve had this policy for over 2 years now and This time round it was just a renewal so I’m wondering if that’s why I am still covered perhaps. Will still confirm.
     
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  24. DAN@ADRIAN FLUX

    DAN@ADRIAN FLUX Site Sponsor Site Sponsor

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    Just to let you know we offer a product called Total Loss Protection. Whilst it's not the exactly the same as your traditional GAP insurance we feel for some customers it can make for a cost effective alternative.

    https://www.adrianflux.co.uk/extras/total-loss/
     
  25. GaryP

    GaryP Active Member MQB Platform

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    Can you cover Northern Ireland...?
     
  26. GaryP

    GaryP Active Member MQB Platform

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    Best to check. The guy I spoke with did have to read a little deeper in the T&Cs he could see on his system. He did initially say Yes, I'd be covered for a Contract Hire car, but then read a little further and saw an exemption.
     
    A4AvantBlackEdition likes this.
  27. cjp2k

    cjp2k Active Member Team Daytona saloon Audi A4 S-line owners group

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    Yeah quite a big impact battered and bruised for 2-3 weeks but fine now thanks!!

    23k of damage apparently
     
  28. GaryP

    GaryP Active Member MQB Platform

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    Did you manage to check your policy details?
     
  29. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    I didn’t actually. I completely forgot. I will set myself a reminder and check tomorrow.
     
  30. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    Just spoken to Privilege and they have confirmed that while they don’t “replace new for old” they do pay out the full new value of the vehicle within the first year on my policy despite me not being the registered owner/keeper.
     
  31. EDRIAT

    EDRIAT Member

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    Hmmm... Page 16, Section 4: https://www.privilege.com/pdf/car-insurance/pr-car-insurance-policy-booklet.pdf

    I don't think I'd be comfortable testing the advice you were given by phone without GAP Insurance in place to fall-back on if needed :blink:
     
  32. GaryP

    GaryP Active Member MQB Platform

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    So having exhausted myself researching on the web and multiple phone calls to Insurers I am going to play it safe and take out a Finance/Contract Hire specific GAP Insurance. My main driver for this is that I am paying a £3k initial payment (this got the overall deal really cheap) and you can now get Initial Payment Protection added to your GAP Insurance. This means that at any point during the 2yr lease if I suffer a Total Loss I will get that £3k back on the GAP Insurance, as well as it covering any difference between Motor Insurance Settlement and Finance Settlement. I can get this for circa £100 for 2 years cover. You can get this cover from the likes of TotalLossGap, ALA, DirectGAP and several others.

    i think its a small price to enure you're covered in what is turning out to be the Murky World of Contract Hire T&C'S and Motor Insurance T&C's. More importantly it will give me the £3k back if some scum back steals the car in the first few weeks/months - which would really hurt if I lost that!

    Guess it comes down to how much risk you are willing to take and can afford to take.
     
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  34. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    I have it confirmed in writing.

    They said as long as I am the first person to have driven the vehicle and registered on the vehicle first (ie insured on the vehicle before anyone else) then I am still covered for the first year only. After that I will need GAP.
     
  35. EDRIAT

    EDRIAT Member

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    good job - That you have it in writing will certainly help your case if you're ever needed to call them out on it.

    It's interesting though isn't it... In the case of new car replacement cover, most motor insurance policy terms refer to you needing to be the first Registered Keeper (of which the V5 registration document is proof), whilst Privelege refer to the "Registered Owner"... The V5 registration document itself has a clear disclaimer that the document is not proof of ownership so... what then qualifies as "Registered Owner"? There is no registry of vehicle owners (only "keepers" who, are not necessarily "owners") and being insured on a vehicle is in itself not proof of ownership either (consider... you don't own your vehicle (the finance company do and it's them that are recorded as the "Registered Keeper" on the V5 document), but you're insured to drive it - as I too am insured to drive a vehicle that I don't own either).

    I think the term "Registered Owner" is a curious one.
     
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  36. GaryP

    GaryP Active Member MQB Platform

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    I'd also recommend checking the T&Cs of your lease, as many state that the Lease will terminate at the point that a Total Loss has been suffered. This probably means that you are then left with no car to drive and need to start a new Lease - and stump up an initial payment again. Where I'm heading with this is that if you have paid a sizeable initial payment you may still want to consider GAP Insurance now as most Finance GAP policies allow you to cover that initial payment. Mine was £3k - so I am defo taking out a Finance GAP policy as soon as I get the vehicle. The initial payment is not a deposit, it does not pro-rata across the life of the Lease - it is what it says on the the tin - Initial Payment (first month hire in another way). For £50 for 1st year cover I see it as a sensible step.
     
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  37. EDRIAT

    EDRIAT Member

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    That raises a good point... the finance company has to agree to the motor insurer replacing the vehicle new-for-old before they can do so. If the finance company reject the replacement car, you have to wonder whether the motor insurer will pay out the cash equivalent of a new vehicle (though probably revised to the original value of the now written off vehicle) or, revert to a market value payout.

    However, this...

    ...at least suggests that Audi/VWFS would be amenable to the offer of a replacement vehicle.

    But this...

    ... suggests that Privelege would by default pay out a cash equivalent of a new vehicle (albeit to the finance company) rather than offer a physical replacement vehicle anyway. I'm not convinced that this is the case but, if A4AvantBlackEdition has this in writing then he at least can fight his corner with some ammunition should the need arise.
     
  38. A4AvantBlackEdition

    A4AvantBlackEdition Well-Known Member TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition

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    I only paid £1600 but where did you get GAP for £50?
     
  39. GaryP

    GaryP Active Member MQB Platform

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    Totallossgap.co.uk

    When I quote £50 I meant £50 for 1 year and that it's still worth getting to protect the initial payment, certainly for me on £3k initial. The 2yr policy is £100.
     
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  40. AlnSaz

    AlnSaz Active Member Team Ibis TFSI Owners Group Audi A4 Audi Avant Owner Group Black Edition S-line owners group Manual

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    Just my recent experience - I got quotes from ALA with Pistonheads 12% discount and gapinsurance.co.uk cheekily using a 'briskoda.net' 10% discount

    £35k car on a 3+23 personal lease deal at £288 p/month. My insurer Aviva don't cover the full invoice price in year 1, just market value as I'm not registered keeper on an HP or PCP finance agreement and will never own the car outright

    So policy is a contract hire GAP with a £10k claim limit and cover of £1k for the down payment. After comparing both with price matching and best deal offers I got the cover for £86 from gapinsurance.co.uk

    I reckon that covers the £6.5k plus any admin fee on the lease payments which will reduce I get nearer the end of lease. And leaves minimum £3k for any shortfall on the 'market value' agreement which again will increase as I get nearer end of lease

    It also gives me a 3 month down payment if I need to get another car. Happy enough with £40 odd quid a year to give added peace of mind

    I know it easier to do all the form filling online but take time to speak to an adviser as they will explain all the minefields around GAP insurance and limits etc

    Phew, hope that all makes sense and helps anyone looking to take GAP cover on a personal lease vehicle :grinning:
     
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  41. Theonenonly

    Theonenonly Driver

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    Thanks mate, I too am with Aviva so will look at getting this arranged before March too.
     
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  42. GaryP

    GaryP Active Member MQB Platform

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    Thanks for that post @AlnSaz !

    I'll give them a try and see if they can beat the quote I mentioned above. Using their online quote tool it comes out around £123 for 2 years for similar contract numbers to yours (I also used a cheeky Briskoda code!). The more I can save the more GTechniq product I can buy! :yahoo:
     
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  43. GaryP

    GaryP Active Member MQB Platform

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    When did you get that quote from gapinsurance? Best they could do today was £105, which is still good to be fair!


    Sent from my iPhone using Tapatalk
     
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