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Residual Value and Gap Insurance


Pricing expert Glass's have released a number of figures which illustrate the depreciation and residual value figures achieved by models and manufacturers in the UK. As a result of the study, it was announced that the Mini brand were the best brand for holding value in the UK.


It was revealed that the Mini brand lost just 16.4 per cent of the average value annually. The small car segment that Mini sell the majority of their models in was the best performing category for models retaining their value.


Whilst Mini finished at the top, US brand Chrysler was the worst performing brand. Chrysler badged models dropped an average of 26.6 per cent every year. The next best performing brand was the Chevrolet brand which had an annual depreciation of of 26.3 per cent. Glass's revealed that the decline in residual value for the US brands was down to the perception of value and demand for models.


However, the second best selling manufacturer, Vauxhall, did not perform much better than that of the bottom brands. The Vauxhall brand achieved an annual depreciation average of just 23.50 per cent. The Vauxhall brand have been one of the most successful brands in the market following the success of both the Astra and Corsa models in the UK, however, depreciation figures have continued to increase.


Land Rover models have been consistently holding their value over the last number of years as they continue to increase the popularity of the brand across the global market. This year the Land Rover brand achieved figures of 17 per cent for the average depreciation annually.


We at Shortfall provide a product that can protect you against the financial implications that can be presented due to depreciation. As you may already know, if your vehicle is written off or stolen, your comprehensive motor insurer will only ever cover as much as the market value of your vehicle on the day it was written off. This could leave you thousands of pounds out of pocket and with the inability to purchase a new vehicle.


There are three types of Gap Insurance that are capable of covering three different amounts. Finance Shortfall Insurance will cover the difference between your motor insurance settlement and the amount of finance you have outstanding on the vehicle. This type of cover has been designed for those who have purchased their vehicle through the form of a financial agreement and only have the desire to clear the outstanding finance.


The next level of cover is Return to Invoice Shortfall Insurance. This form of Shortfall Insurance is widely available within dealerships across the country and is more than likely to have been offered to you during the purchase process of your vehicle.


This form of Shortfall Insurance will cover the difference between your motor insurance settlement and the original purchase price that you paid for the vehicle.


The last form of Shortfall Insurance for you to consider is Vehicle Replacement Insurance. This form of Shortfall Insurance will cover the difference between your comprehensive motor insurance settlement and the average cost to replace your vehicle with the same make, model, age and mileage as your vehicle.