Gap Insurance is a very simply form of insurance that runs along side your own motor insurance and protects you financially if your Audi is written off.
Depending upon the cover you chose you can protect the difference between your Audis vakluation and either the invoice price you paid, the amount outstanding on finance and even the replacement cost of another Audi on a like for like basis.
We strongly believe that because Gap Insurance is so important, that it should never be presented in a context that leaves customers or policy holders confused and without a full understanding of how it works and what it will and will not cover.
We are regularly credited by our customers for our easy to read, simple explanatory articles and examples. We are told that because they are presented in a straight forward manner, they significantly assist the customers understanding of how various level of cover work and perform which allows them to make well informed decisions about protecting their Audi with various levels of Gap Insurance.
The large majority of customers first hear about Gap Insurance when they are at their Audi dealership. While finalising all the paperwork for their Audi, the salesperson will introduce the concept of Gap Insurance. Whilst releasing the importance of it, customers are often put off immediately when they are quoted the average dealership price of £399 and above. In fact, we have spoken to members of the public and customers who have been quoted (or even paid!) anything in between £399 to £1000. Customers thus decide to shop online and they arrive on Shortfall.co.uk.
At Shortfall.co.uk, all our polices have been and are currently subject to a range of awards for cost and quality. All our policies are genuine, tried and tested and most importantly, backed by the financial compensation scheme.
What is shortfall insurance? Gap Insurance is a very simply form of insurance, in brief it makes sure that depending upon the level of cover you chose if you Audi is written off you can walk away with, no financial liability, (Finance and Contract Hire Gap Insurance) the deposit you paid and the equity you have generated while making payments(Return to Invoice Gap Insurance) or even the replacement cost(Vehicle Replacement Insurance).
Before you read the examples, please consider the following:
An estimated 600,000 vehicles are written off each year in the UK alone.
The average vehicle can depreciate by up to 50% in the first three years, including your Audi.
Your comprehensive motor insurer is only ever obliged to pay you the market value of your Audi on the day it was written off.
On this page you will find three examples of our three most popular Shortfall Gap Insurance policy types:
Return to Invoice, Vehicle Replacement and Contract Hire/Finance Gap.
In these Gap Insurance examples, you will see that we have used "Edwina" and her £30,000 Audi TT which is written off in three years time and how she would be left financially if she chose various levels of cover.
Please Note that as feature rich as our Gap Insurance policies are we can not cover the cost of your Audi’s road tax as this can be claimed back from the DVLA.
Vehicle Replacement Insurance is similar to the standard return to invoice in many ways. However, unlike return to invoice gap insurance, it will also protect you against any increase in the invoice price of your Audi.
This means that if your Audi is written off or stolen you are paid the replacement cost of a like for like vehicle the same age, mileage, condition and specification as yours was on the day that you drove it home from the dealership. If that model is no-longer available then settlement is based on the superseding model.
Don't forget that vehicle prices over a number of years will naturally increase for a number of reasons including an increase in VAT, also if Audi introduce an upgraded version of your model. It is not so long ago that Audi had fantastic deals on the what was current model of the Audi A6 which was upgraded to a new and improved version.
Lets look at an example of how vehicle replacement insurance works.
Edwina pays £30,000 to purchase her Audi TT. Three years later, Edwina is involved in a motoring accident that thankfully leaves her unhurt, but her Audi TT is written off and Edwina receives £15,000 from her comprehensive insurer, given that this was the market value of her Audi at the time it was written off. Edwina now has a Shortfall of £15,000.As you may already know, the basic return to invoice gap insurance policy will just pay this outstanding £15,000 and return Edwina to the original invoice price.
However, Edwina is informed by her Audi dealership that her TT model has been upgraded and has a newer leaner, fuel efficient engine, subsequently the price has also increased by £2,500 to £32,500.This means that to buy another TT the same age, mileage and specification as Edwina's was on the day she collected it, with inflation is now £32,500, Edwina now has a total Shortfall of £17,500
Vehicle replacement would now top up Edwina's insurance settlement to the full replacement cost of alike for like Audi TT £32,500, from this Edwina can clear any finance if needs be and the balance of the funds is her's to do with as she sees fit.
Return to Invoice is one of the most common types of Gap Insurance.
It is a very simply level of cover to understand as simply put, if your Audi is written off, between your two insurance companies you are returned back to the invoice price you originally paid. In reality your own motor insurance company still pay you the value of your Audi on the day it was written off and your gap insurance simply tops this figure back up to the invoice price you paid.
You now have the full invoice price back and can if necessary clear any outstanding finance. The rest of the funds, the deposit you have paid and the equity you have generated while making your payments are then yours to do with as you see fit.
So what is Return to Invoice Gap Insurance and how can it protect your Audi?
Lets look at a real life example
Edwina pays £30,000 to purchase her Audi TT. Three years later, Edwina is involved in a motoring accident that thankfully leaves her unhurt, but her Audi is written off. Edwina's motor insurance company offer her the market value for her TT which for illustration purposes is £15,000.
Without any form of Gap Insurance Edwina would have only the £15,000 to replace her Audi. Yes she could use her savings to buy another car and yes she could take out a bank loan or hire purchase agreement but why should she?
In this example Edwina would now receive a second payment from her gap insurance provider. This would mean that she would now have back the full purchase price of £30,000. As always any finance must be cleared and the balance of funds is Edwina's to spend as she chooses.
This illustration may be a little over exaggerated however no-one likes to think of just how much their car will lose over time, and while Audi have a stronger residual value than others predicted depreciation rates may surprise you.
For example if you have bought an Audi A1 Hatch back 1.2 TSFI 86 BHP S Line 3door according to What car 2013 you will have paid in the region of £17,175. However by the end of the first year your Audi A1 is estimated to be worth £13,467, year two £11,175, year three £9,281 and the fourth year £8,045.
Perhaps an Audi A6 Avant 2.0 TDI 177 SE 5Door. Again you will have paid approximately £32,775, year one this falls to £22,703, year two £18,852, year three £15,653 and the fourth year £13,579.
These rates of depreciation are not excessive in comparison to other manufactures and in fact are reasonably low. Please also remember that this rates are based on average usage and average mileage and while no-one can ever promise to know exactly what a certain car will be worth at the end of a set period of time in the future they are based on factual historical data.
Our policies are unlike many others in the market place and we have many additional features which are not standard, so before you buy return to invoice gap insurance for your Audi from anywhere why not compare our levels of cover and see just how inexpensive and easy return to invoice gap insurance can be.
Contract hire, or Finance Gap Insurance as it was first known as, is a policy designed for drivers who have took out a form of finance agreement to purchase their Audi. Examples of finance agreements are: Contract Hire, Hire or Lease Purchase.
Simply put, finance gap insurance pays the difference between your Audi's valuation on the day it was written off and simply clears your outstanding finance meaning you can walk away with no further liability. ( please note that while out policies have many features such as no market value clause and paying towards your own motor insurance companies excess, any late payment charges or arrears will be deducted.)
If you purchased your vehicle on Contract Hire and your Audi is written off or stolen, you may still be liable for the remaining payments of the agreement. Depending upon your contract hire company this could be up to 90 % of all outstanding rentals. They may call it anything from settlements to back rentals but just like standard forms of finance it is an amount that you are still financially responsible for.
Lets look at a Finance Gap Insurance Example and see how it could protect your Audi?
Edwina takes out a five year finance agreement which involves set monthly payments of £500. Three years later, Edwina awakes to find her Audi is no longer in the drive. She contacts the police who later inform her it has been found set alight. Edwina's contacts her finance company to find that even after her own insurance companies settlement it is not enough to clear the amount she still has outstanding on finance.
Without any form of shortfall insurance Edwina is left in the terrible position of having no Audi to use and having to use what ever savings she has to clear the shortfall.
Please note that Contract Hire/Finance Gap will not protect your Audi if it has been funded on a bank or personal loan as the finance has to be linked to the vehicle.
From free policy transfer to no market value clauses, but don't take our word for it way not compare our level of cover and see how a Shortfall policy could protect your Audi.
Our policies pay £750 towards the cost of your own motor insurance excess.
You can Transfer your policy at any time to another eligible vehicle free of charge.
All Factory fitted options are covered.
We do not limit the purchase price of your Audi to a percentage of any guide price.
We do not have a market value clause on settlement.
We do not charge for name, address and registration number changes.
Our customer service call centre is completely UK based.
Our claims team are UK based.
All Policies are backed by the Financial services Compensation Scheme.
You have a 30 day cooling off period during which time you can cancel and proving you have not attempted to make a claim receive a full refund.
You can cancel at any time and receive a pro-rata refund less a nominal administration fee charged by the underwriters.
The list goes on, however, we hope that by now you can appreciate that our policies are amongst the most comprehensive in the UK today.
According to industry experts, the average Audi model can depreciate by up to 50% in the first three years. No driver likes to hear this, nor accept this, given that it is very likely that you will have paid a considerable amount for your Audi, and then you are told that half of this amount will practically disappear within the first three years.
This is why Gap Insurance is so important to not just your Audi, but most importantly to your finances. Gap Insurance, as explained on this website can help protect you against this depreciation.
No one can accurately say what your Audi will be worth in three or four years time. However by using figures provided by 'What Car', who take into account past and current rates of depreciation, as well as estimated usage and mileage, we have designed five examples of a variety of Audi models depreciating throughout a four year period.
Example 1 –
Audi TT Coupe 2.0 TDI 170 Quattro Sport 3dr
Invoice price you paid - £28,305
Year 1 - £22,528
Year 2 - £18,704
Year 3 - £15,528 – You will see that within the first three years, your Audi TT has lost £12,777 in value
Year 4 - £13,476 – You will see that within the first four years, your Audi TT has lost £14,829 in value
Example 2 –
Audi A3 Hatchback 2.0 TDI 150 Sport 3dr
Invoice price you paid – £22,730
Year 1 – £16,350
Year 2 – £13,574
Year 3 – £11,274 – You will see that within the first three years, your Audi A3 has lost £11,456 in value
Year 4 – £9,774 – You will see that within the first four years, your Audi A3 has lost £12,956 in value
Example 3 –
Audi A5 Coupe 1.8 TFSI 170 SE 2dr
Invoice price you paid – £28,845
Year 1 – £21,357
Year 2 - £17,711
Year 3 - £14,743 – You will see that within the first three years, your Audi A5 has lost £14,102 in value
Year 4 - £12,778 – You will see that within the first four years, your Audi A5 has lost £16,067 in value
Example 4 –
Audi A6 Avant 3.0 BiTDI 313 Quattro SE 5dr
Invoice price you paid - £46,670
Year 1 – £26,723
Year 2 – £22,187
Year 3 – £18,411 – You will see that within the first three years, your Audi A6 has lost £28,259 in value
Year 4 – £15,942 – You will see that within the first four years, your Audi A6 has lost £30,728 in value
Example 5 –
Audi Q5 4x4 2.0 TDI 177 Quattro SE 5dr
Invoice price you paid – £32,220
Year 1 – £29,030
Year 2 – £24,104
Year 3 – £20,012 – You will see that within the first three years, your Audi Q5 has lost £12,208 in value
Year 4 – £17,334 - You will see that within the first four years, your Audi Q5 has lost £14,886 in value
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The history begins with a man called August Horch, who was the founder of the German automobile manufacturer, Horch & Co Company in 1899.
Mr Horch would later leave this company due to difficulties with the management and would later set up another company called Audi, which is Latin for Horch.
To the surprise of many, Mr Horch was actually banned from using his family name for business purposes as it was copyrighted by his former business.
The German company's first car was the Type B and was introduced in 1910.
Audi would be the first German car manufacturer to manufacturer a left handed drive car. The company would enjoy relative success until 1920 when again, its founder Mr Horch would experience more difficulties with the company's management. The company remain up until 1931, when it was close to bankruptcy. The management identified the need for a union of other German automakers in order for the company to survive.
As a result, Auto Union was founded which consisted of the following companies: DKW, Wanderer, Horch and Audi.
The four rings would therefore represent the four brands that make up Auto Union and would become the company's logo which Audi Still uses today.
Like the majority of German automakers, in the aftermath of World War Two, the company was subject to harsh treatment by the Soviet Union, who would physically dismantle Audi and force the company into liquidation.
In 1958, Daimler-Benz took a 80% stake in Auto Union, which would later increase to 100% in 1959. This would result in the company Auto Union folding as it all merged into Daimler-Benz, however Volkswagen would take reincarnate the Audi Brand and acquire a stake in the now newly re-formed Audi brand.
Audi’s current model portfolio consists of the following successful models: A1, A3, A4, A5, A6, Q3, Q5, Q7, TT, Audi R8 and Audi RS.