What can Shortfall Insurance do for your Ford?
This page has been designed to help you with your understanding of Shortfall Gap Insurance and why it is important for you, your Ford and most importantly, your finances.
Simply put, Gap Insurance protects you the only way insurance can, financially, if your Ford is written off. Don't forget cars lose value over time and your own insurance company will only offer you the value of your Ford on the day it was written off, this could be thousands of pounds less than you originally paid and without any form of gap insurance you have to cope with any financial ramifications alone.
The majority of drivers first hear about Shortfall Insurance while finalising all the vehicles paperwork at the dealership. It is likely that the salesperson would have informed you about their type of Shortfall Insurance and the importance of it, which obviously caught your attention. You listen closely, while realising how important Shortfall Insurance may be to you.
However, your attention fades away when the salesperson quotes you the average dealership Shortfall Insurance price of £399. You politely decline the offer and decide to go home and do what you always do when you’re in a dilemma… ask Google.
Google takes you to us, Shortfall.co.uk and you see that you can find Shortfall Gap Insurance prices for as low as £39.00 inclusive of Insurance Premium Tax. Our policies are genuine, tried and tested and up to 85% cheaper than main dealership prices.
You can find out why the prices differ between dealerships and online providers by clicking here. We have learnt from previous customers that by simply providing an easy to read example of each Shortfall Insurance policy, it significantly aids the understanding and helps customers make informed decisions.
To assist your understanding, we use Tom and his Ford Focus that had an original invoice price of £15,000.
Please note that the names and figures used in these examples have been designed for illustration purposes only.
Before you read the examples, please consider the following important FACTS:
In the UK, 600,000 vehicles are written off each year.
The average vehicle depreciates by up to 50% in the first three years, including your Ford.
Your comprehensive insurer will only pay you the market value of your Ford at the time it was written off or stolen.
Your Shortfall Insurance provider will not reimburse you your vehicles road tax as this can be claimed back from the DVLA.
What can Vehicle Replacement Shortfall Insurance do for your Ford?
The difference is that in addition to returning you to the original invoice price you paid for your Ford, Vehicle Replacement will also pay you any inflationary increase in this invoice price.
The original invoice price of your Ford may increase for a range of reasons, for example, if Ford introduce an upgraded version of your model, if the government increase VAT or if the cost of certain raw materials increase. In many ways we naturally expect the price we pay to increase over a period of years.
Vehicle Replacement Shortfall Insurance will pay you the difference between the market value of your Ford at the time it was written off or stolen and the amount you now need to purchase another Ford, the same age, mileage and condition as yours was when you first drove it out of the show room.
Please see the below example which we have put together with the aim to deepen your understanding of how Vehicle Replacement Shortfall Insurance can protect your Ford:
Tom purchases a Ford Focus for £15,000. Three years down the line, en route to work one morning and through no fault of his own, Tom is involved in a motoring accident that thankfully leaves him and the other driver involved unhurt but his Ford Focus is written off. Tom receives £7,500 from his comprehensive insurer as this was the market value of his Ford Focus at the time of the incident.
Tom is informed that his Ford Focus model is no longer made as super improved version of the Ford Focus has been introduced. The cost of this new Ford Focus has now increased by £2,500 to £17,500. This means that for Tom to buy another Focus the same as his originally was Tom now needs an additional £10,000.
Vehicle Replacement Shortfall Insurance will pay the difference between Tom's Insurance companies settlement and the amount he needs to buy another Focus the same age, mileage and condition as his was on the day that he first collected it from the dealership. As that model is no-longer available then settlement is based on the superseding model. In the case Tom would receive another cheque from his Gap insurance for £10,000. He now has the full replacement cost. If Tom Paid cash for his Ford Focus then the £17,500 is Toms to spend as he pleases.
What can Return To Invoice Shortfall Insurance do for your Ford?
Return to Invoice Shortfall Insurance is designed to return you to the original invoice price you paid for your Ford, if in the unfortunate case your Ford is written off or stolen.
Your comprehensive insurer will only ever pay you the market value of your Ford at the time it was written off or stolen, and if you take into account that the average vehicle will lose 50% of its value in the first three years, this can be considerably less than what you originally paid.
Return to Invoice Gap Insurance will top you up to the invoice price you originally paid once you have received your comprehensive insurers settlement payment,
Please see the real life example which we have designed in order to assist your understanding of how Return to Invoice Gap protect your Ford and most importantly your finances:
Tom purchases a Ford Focus for £15,000. Three years down the line, Tom awakes to find that his Ford Focus is no longer on the driveway and is later informed that it has been found burnt out and stolen. Tom receives £7,500 from his comprehensive insurer as this was the market value of his Ford Focus at the time of the incident.
This means that Tom only has £7,500 to either pay off any outstanding finance or to purchase another Ford Focus, and without any form of Shortfall protection, Tom may have to either use his savings or even take out a loan.
What can Finance and Contract Hire Shortfall Insurance do for your Ford?
Finance and Contract Hire Shortfall Insurance is designed to allow you, the driver to walk away from a finance agreement without any financial liabilities, if in the unfortunate case your Ford is written off or stolen.
If in the unfortunate case your Ford is written off or stolen, many drivers assume that their comprehensive insurer will clear all the outstanding finance.
This is not always the case and in most cases we deal with, even after you have been paid by the comprehensive insurer, there is always still an outstanding balance, which you will be legally bounded to.
Please take a look at the following example which we have designed to assist your understanding of how Finance and Contract Hire can protect your Ford:
Tom takes out a three year finance agreement in order to purchase his Ford Focus. It involves set monthly payments of £300. After the first year, Tom awakes to find that his Ford Focus has been stolen. Tom has already paid one year of the finance agreement, totaling £3,600. In theory, Tom is still liable for the remaining two years of payments which totals £7,200.
Tom is paid £5,000 by his comprehensive insurer, which means that there is £2,200 still outstanding. The finance company are well within their right to ask Tom to pay this remaining outstanding balance and in the past we have seen up to 90% of any outstanding amount be requested. Without any form of Shortfall cover, Tom will have to use his savings or even take out a bank loan to pay this outstanding balance.
Industry experts claim that the average vehicle can lose up to 50% of its original value within the first three years. In other words, your Ford may lose half of its original value within the first three years of ownership, and this is through no fault of your own.
We at Shortfall.co.uk understand that drivers do not want to hear this, given that it is likely that you will have just paid a large sum for your Ford, then to be told, half of this sum in three years time is very likely to, in theory disappear.
Although there is nothing you can do to physically prevent your Ford from deprecating, Shortfall Gap Insurance can provide you with important financial protection against depreciation, if in the unfortunate case your Ford is written off or stolen.
To assist you with your understanding, we have provided you with a number of examples of Ford depreciation. Please note that the figures we use on this page have been taken from 'What Car', who provide historical and current data to predict what your Ford will be worth in up to four years time.
Example 1 –
Ford B-Max MPV 1.0T EcoBoost 100 Titanium 5dr
Invoice price you paid - £17,595
Year 1 – £10,175
Year 2 – £8,375
Year 3 – £6,874 – You will see that within the first three years, your Ford B-Max has lost £10,721
Year 4 – £5,875 – You will see that within the first four years, your Ford B-Max has lost £11,720
Example 2 –
Ford C-Max MPV 1.0T 125 Ecoboost Titanium S/S 5dr
Invoice price you paid - £20,345
Year 1 – £11,560
Year 2 – £9,495
Year 3 – £7,808 – You will see that within the first three years, your Ford C-Max has lost £12,537
Year 4 – £6,675 – You will see that within the first four years, your Ford C-Max has lost £13,670
Example 3 –
Ford Fiesta Hatchback 1.0T 100 Ecoboost Zetec S/S 3dr
Invoice price you paid - £13,745
Year 1 – £8,815
Year 2 – £7,253
Year 3 – £5,968 – You will see that within the first three years, your Ford Fiesta has lost £7,777
Year 4 – £5,087 – You will see that within the first four years, your Ford Fiesta has lost £8,658
Example 4 –
Ford Focus Estate 1.6 TDCi 115 Titamium 5dr
Invoice price you paid - £21,245
Year 1 – £12,526
Year 2 – £10,300
Year 3 – £8,449 – You will see that within the first three years, your Ford Focus has lost £12,796
Year 4 – £7,225 – You will see that within the first four years, your Ford Focus has lost £14,020
Example 5 –
Ford Grand C-Max MPV TDCi 115 Zetec 5dr
Invoice price you paid - £20,945
Year 1 – £12,464
Year 2 – £10,223
Year 3 – £8,409 – You will see that within the first three years, your Ford Grand C-Max has lost £12,539
Year 4 – £7,201 – You will see that within the first four years, your Ford Grand C-Max has lost £13,744
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Ford Motor company, is usually known as just Ford and is an American car manufacturer which has headquarters in Dearborn, Michigan. The company was founded by Henry Ford and was incorporated in 1903. Ford also own small stakes in Mazda and Aston Martin.
The Ford company is the second biggest U.S based car manufacturer and is the fifth largest in the world based on vehicle sales produced in 2010. In the 20th Century, Henry Ford had his first attempt at owning a car company using his own name the Henry Ford Company in 1901, this was then changed to Cadillac Motor company in 1902 after Ford left and took the rights to his name.
The Ford Motor company was then launched in 1903 at a converted factory using $28,000 from twelve investors. Horace and John Dodge were two of the investors (who later founded their own company). During the starting years at Ford, the firm produced just a small number of cars each day at the company factory in Michigan.
There were groups of around two or three men who worked on each vehicle and they assembled them with parts that were acquired from supplier company's that were contracting for the Ford company. In just a decade the company had lead the world with the assembly line concept and the company then brought a lot of the car part production in house, in vertical integration, which seemed to be a much better path at the time.
Henry Ford himself was forty years old when he founded the company and it went on to become one of the most profitable and largest in the world, it was also one to surive through the Great Depression. The company has been continuously run by family over the past century.
The first engine to have a removable cylinder head was produced by Ford in 1908, in the Model T. 22 years later in 1930, the firm produced the Model A, which was the first ever vehicle to feature the use of safety glass in the windshield. From 1956 Ford offered the Lifeguard safety package, which used such innovative technologies as a deep dish steering wheel, optional front and the very first use of rear seatbelts in a car, there was also the option of a padded dash.
Child proof door locks were then introduced in 1957 and that same year the company were able to offer the first retractable hardtop. The Ford Mustang was revealed in 1964 and the seatbelt reminder light was developed in 1965. In the 80's, Ford produced many highly successful models round the world and in 94 and 95 acquired Jaguar and Aston Martin. Large number in vehicles were continued to be sold by Ford throughout the 90's.
Unfortunately when the new Century came, due to higher fuel prices and a faltering economy, there was a fall in Ford's market shares and there was a distinct diminsh in profits. With the 20th Century The Ford Motor Company introduced a wide range of new vehicles, such as crossover SUV's, rather than the more typical body on frame. In 2008 Ford sold it's shares in Jaguar and Land rover to Tata Motors for around $2.3 Billion.
The Ford Focus was the best selling car in the UK for 2012. In November of 2012 the Ford company announced that Alan Mulally, the CEO would be staying with the company until 2014. Mark Fields was also named the president of operations in America, as the new operating officer.