Essential cover for your vehicle fleet
Vehicles are an emotive subject; they provide us with more than just transport. One of the most recognisable forms of advertising a company can have is a new vehicle in the company livery.
When customer's purchase vehicles they consider a number of factors, be it capital outlay to their business, vehicle type, reliability, image or cost to run. At the outset these factors have a major bearing on the decisions that they make.
How often do we really consider what would happen if the vehicle was written off?
You could be forgiven for thinking that your vehicle insurance will settle your existing finance agreement and provide sufficient funds to purchase an equivalent vehicle.
This is not always the case! It has been widely reported that used vehicle values have fallen sharply in recent months and now more than ever there is a strong possibility that the current value of your vehicle is less than you would expect. For example, if you purchased a mid range executive saloon last year and covered 10k miles it may be worth only 60% of its original cost. As motor insurance settlements are typically based on current market values, many of us could be facing an unwelcome surprise in the event of a total loss occurring.
A few questions I always ask when speaking to customers are; what would happen in the event that
- The vehicle was written off due to fire, theft or accident?
- Would your insurance settlement cover the outstanding balance on your finance agreement and provide sufficient funds to pay a deposit on a new vehicle?
- What would be the total cost to you or your business to replace the vehicle with the equivalent new model?
These are questions that are usually only considered after the event.
The simple answer is, that without prior planning, you or your company would be liable for any shortfall between the insurance and finance agreement settlement figures. Likewise, you will be left to find additional capital for a replacement vehicle.
At Lombard we recognise and share this concern and are keen to ensure that our customers are offered protection against unforeseen costs.
We have two levels of protection available, which provide cover should your vehicle be subject to a full motor insurance payout. If this occurs the balance outstanding on your finance agreement maybe be settled, subject to terms & conditions as defined in the policy documents.
The first option is GAP cover, which bridges the gap between your finance agreement settlement figure and your fully comprehensive motor insurance payout, therefore reducing the possible risk of negative equity.
The second option is Return to Invoice cover. As the name suggests, on a used vehicle it provides cover for the difference between the motor insurance settlement and the original invoice price of the vehicle. On a new vehicle it covers up to the current list price of the vehicle.
We can also provide GAP cover for heavy commercial vehicles up to 44 ton Gross Vehicle Weight.
The description of the products we have provided here are subject to the terms & conditions of the individual policies. If you would like further details on our GAP or Return to Invoice insurance products please contact your local Lombard Business Centre who will be delighted to provide full details.
Let me introduce you to Joe Beattie a Lombard customer whose business has benefited from RTI cover.
