What can Shortfall Insurance do for your Citroen?
This page has been designed with only one thing in mind, you the customer.
We know that some online providers are incapable of providing simple and easy to understand explanatory articles on what is Shortfall Insurance and how is it important to your finances.
Online providers have a tendency to use the typical insurance jargon that often leave the customers confused without knowing the true understanding of Gap Insurance what it dose and how it works.
We at Shortfall.co.uk have been credited by our customers for our simple and easy to understand explanatory articles and examples.
In these examples, we use Nicole and her Citroen C3, which she paid £10,000.
Please note that the names and figures do not represent any real life examples.
We know that the majority of our drivers first heard about Gap Insurance while at the dealership. We also know that they declined immediately after being quoted the average dealership price of £399.
Here at Shortfall.co.uk, you will find policies for as low as 85% of the main dealership prices, all which are genuine, tried and tested and backed by the financial services authority.
Before you read the examples, please consider the following:
In the UK each year, an estimated 600,000 vehicles are written off or stolen
The average vehicle can depreciate by up to 50% in the first three years, including your Citroen
Your comprehensive insurer will only ever pay you the market value of your Citroen at the time it was written off or stolen
Your Shortfall Insurance provider will not reimburse you your Citroen's road tax as this can be claimed back from the DVLA
How Can Vehicle Replacement Shortfall Insurance Protect Your Citroen?
Whilst Return to Invoice will just return you back to the original invoice price you paid for your Citroen, it does not take into account that this original invoice price, the amount you originally paid may have increased during the period of your ownership.
The invoice price may increase for several reasons for example, if Citroen introduce an upgraded version of your original model or if the government decide to increase VAT.
Vehicle Replacement Shortfall Insurance will pay the difference between your comprehensive insurers settlement payment and the amount now needed to purchase another Citroen of the same age, mileage and condition as yours originally was when you first drove it out of the show room.
Please see the below example that we have put together in order to assist your understanding of Vehicle Replacement Gap Insurance:
Nicole purchase a new Citroen C4 for £10,000
Three years later, Nicole awakes to see that her Citroen has been stolen
Nicole's comprehensive insurer pays her the market value of her Citroen at the time it was written off, which was £5,000.
Nicole is also informed by her local Citroen dealership that her original C4 model has now increased to £12,500
This means that Nicole now has an outstanding gap of £7,500
In other words, to purchase another Citroen C4, Nicole needs an additional £7,500
Vehicle Replacement Insurance will pay Nicole this £7,500 and bridge the gap that has occurred. She now has the full replacement cost back, from this she can clear any finance if needs be and the balance of funds, the deposit she paid and the equity she has generated, and the inflationary increase is hers to spend as she pleases.
What can Return to Invoice Shortfall Insurance do for not just your Citroen, but most importantly to your finances?
Return to Invoice Gap is said to be the most popular form of Gap Insurance available in the UK. On the other hand, we at Shortfall believe this to be because of the level of exposure the level of cover receives within dealerships across the UK.
Return to Invoice Shortfall Gap Insurance will bridge the difference between what your comprehensive insurer pays you (the market price of your Citroen at the time it was written off or stolen) and the original invoice price you paid for your Citroen.
Once you have been returned back to the original invoice price, you are now then in the position to either pay off any outstanding balance on your finance agreement (if for example you had a finance agreement in place) or to purchase another Citroen if you so wish.
Please see the below example which we have designed to aid your understanding of how Return to Invoice Shortfall Insurance can protect your Citroen and most importantly your finances:
Nicole purchases a new Citroen C4 for £10,000
Three years later, Nicole awakes to see that her Citroen has been stolen
Nicole's comprehensive insurer pays her the market value of her Citroen at the time it was written off, which was £5,000
Nicole, through no fault of her own, now has a financial gap of £5,000
The Return to Invoice Shortfall Gap Insurance policy would bridge this gap and pay Nicole this outstanding £5,000.
Above is an example of the depreciation rates for your Citroen model and how a Return to Invoice Gap Insurance policy may help you.
Is Finance and Contract Hire the best level of Gap Insurance for your Citroen?
Contract Hire/Finance Gap is designed for anyone who has taken out a finance agreement for example: Contract Hire, Hire Purchase or Lease Purchase. It is designed to allow you to walk away from the agreement without any financial liabilities.
Simply put, if your Citroen is written off it pays the difference between your Citroen's value on the day it was written off and clears your outstanding finance. Yes you have no car to use and yes you will have to find another deposit to buy another but with finance and contract hire gap insurance you are not left in the terrible position of having to pay for a car you no longer have.
Please see the below example that we have designed in order to help you with your understanding:
Nicole buys a Citroen C3 on Personal Contract Purchase. This means she pays three years with a monthly payments of £200 then she can either part exchange her C3, hand it back or pay an option final payment and the C3 is Nicole's forever.
Two years down later, her Citroen is written off
Nicole has already paid two years worth of £200 monthly payments that total to £4,800 (24 months x £200)
Her own motor insurance company send Nicole's finance company the market value of her car on the day it was written off, however there is still a shortfall of £3250.
Without any form of gap insurance Nicole is legally responsible for paying this to her finance company.
Please note that Contract Hire/Finance Gap does not reimburse any financial penalties, which are as a result of late payments that occurred before your vehicle was written off.
Please note that Contract Hire/Finance Gap does not protect a loan shortfall if the agreement is not linked to a vehicle. For example, if it is instead linked to a Bank or a Personal Loan.
Contract Hire/Finance Gap Insurance however would pay this remaining £3250 for Nicole meaning that she can walk away with no further financial liability.
Experts in the field of car insurance claim that the average vehicle can depreciate by up to 50% in the first three years. In other words, it is possible that your Citroen may lose half of its original value within the first three years of you driving it out of the show room.
As you may already know, if in the unfortunate case your Citroen is written off or stolen, you will only be paid the market value your Citroen was worth at the time it was written off or stolen. However because of depreciation, this can be considerably less than what you originally paid, however many years ago.
To help you with your understanding, we have provided you with a number of Citroen depreciation examples.
Please note that the figures used in this page have been taken from 'What Car', who base their figures on average Citroen depreciation, usage and millage rates.
Example 1 –
Citroen C3 Hatchback 1.1i 60 VT 5dr
Invoice price you paid - £10,895
Year 1 – £7,031
Year 2 – £5,763
Year 3 – £4,735 – You will see that within the first three years, your Citroen C3 has lost £6,160
Year 4 – £4,041 – You will see that within the first four years, your Citroen C3 has lost £6,854
Example 2 –
Citroen C4 Hatchback 1.4 VTi 95 VTR 5dr
Invoice price you paid - £14,000
Year 1 – £7,053
Year 2 – £5,802
Year 3 – £4,777 – You will see that within the first three years, your Citroen C4 has lost £9,223
Year 4 – £4,077 – You will see that within the first four years, your Citroen C4 has lost £9,923
Example 3 –
Citroen C5 Estate 2.0 HDi Exclusive 5dr
Invoice price you paid - £25,500
Year 1 – £11,791
Year 2 – £9,665
Year 3 – £7,869 – You will see that within the first three years, your Citroen C5 has lost £17,631
Year 4 – £6,681 – You will see that within the first four years, your Citroen C5 has lost £18,819
Example 4 –
Citroen Berlingo Multispace MPV 1.6 95 VT 5dr
Invoice price you paid - £12,960
Year 1 – £7,749
Year 2 – £6,382
Year 3 – £5,242 – You will see that within the first three years, your Citroen Berlingo has lost £7,708
Year 4 – £4,457 – You will see that within the first four years, your Citroen Berlingo has lost £8,503
Example 5 –
Citroen C4 Picasso MPV 1.6 e-HDI 110 A'dm Edition EGS6 5dr
Invoice price you paid - £20,500
Year 1 – £12,009
Year 2 – £9,795
Year 3 – £7,990 – You will see that within the first three years, your Citroen C4 Picasso has lost £12,510
Year 4 – £6,378 – You will see that within the first four years, your Citroen C4 Picasso has lost £14,122
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It is part of the PSA Peugeot Citroen group.
The history of Citroen dates back to founder Andre Citroen. The company first began to manufacturer weapons for the French war effort in World War One. After the war, weapon demand was dramatically reduced that forced Andre to diversify into the automobile market.
The first vehicle to bear the Citroen name was the Type A model, which was introduced in 1919. The company attempted to merge with American auto giant General Motors the same year, however General Motors would decide against in the last days of the business deal.
In 1924, the company introduced the first all steel body car in Europe, which was the B10 model and in 1933, it also introduced the first diesel passenger car, which was known as the Rosalie model.
In 1934, the company filed for bankruptcy and a year later, its legendary founder Andre died. The company was then taken over by Pierre-Jules Boulanger, who would revive the company to its founding success.
Boulanger is well known for its hard line stance against the Nazi movement during the German occupation of France. He was said to be classed by the Nazi’s as one of the most important enemies of the Third Reich. It's factories were taken over by the Nazi Movement and Boulanger amusedly ordered its workers to fit the oil dipsticks in the engines in the wrong place which caused engine failures.
Citroen would gain enormous respect throughout France for its resistance during the occupation. As a result of the 1973 oil crisis, the company experienced serious financial difficulties. In 1976, fellow French automaker Peugeot would acquire 90% of Citroen and they both would form the PSA Peugeot Citroen Company.
The company is also a significant player in the motor racing industry.