What can Gap Insurance do for your Land Rover?
Shortfall Gap insurance can pay the difference between your Land Rover's valuation on the day it is written off and depending upon the level of cover you opt for, either simply clear all outstanding finance, protect the invoice price you paid or even the replacement cost.
This page has been designed to assist you with your understanding of Shortfall Insurance and how it can protect not just your Land Rover, but most importantly your finances. After all, your Land Rover is only a lump of metal and unlike you, it can be replaced.
As much as we all wish, our personal finances are not the same, however, no one has a bottomless pit of money.
Gap Insurance while not being able to stop your Land Rover from being stolen or from being involved in an accident can provide your finances with much needed protection.
At Shortfall.co.uk, customers will find that they have access to a range of policies for as low as £39.99 inclusive of insurance premium tax. All our policies are genuine, tried and tested and are all backed by the financial compensation scheme.
We are proud to say that a range of our policies are currently subject to a range of awards for both cost and quality.
On this page you will find three examples of our three forms of Shortfall Gap Insurance and how they can assist you and your Land Rover model: Return to Invoice, Vehicle Replacement and Contract Hire/Finance Gap.
In these examples, we use Stuart and his Land Rover Discovery, which he paid £30,000.
Before you read the examples, please consider the following facts:
An estimated 600,000 vehicles are written off in the UK each year.
The average vehicle can depreciate by up to 50% in the first three years, including your Land Rover
Your comprehensive insurer will only ever pay you the market value of your Land Rover at the time it was written off or stolen
What can Vehicle Replacement Shortfall Gap Insurance do for your Land Rover?
Vehicle Replacement Shortfall Gap Insurance can pay you the difference between your Land Rover's valuation on the day it is written off and the amount of money that you now need to purchase another Land Rover, the same age, mileage and condition as yours originally was on the day that you first collected it from the dealership. If your original model is no longer available, then you will be paid the relevant funds to purchase the superceeding model.
Please take some time to look at the example of Stuart below:
Stuart purchases his Land Rover Discovery for £30,000. Three years later, Stuart is involved in a motoring accident which unfortunately writes his Land Rover off. Stuart receives £15,000 from his comprehensive insurer, given that this was the market value of his Land Rover at the time it was stolen.
Without any form of protection and without using any of his own savings this is he only amount that Stuart has to be able to replace his Land Rover and or clear any finance. To make matters worse Stuart is informed by his local Land Rover dealership that the invoice price of his Discovery has now increased by £5,000 to £35,000. It is a newer model, better road handling, better fuel economy but over £5,000 more.
This means that to purchase a Land Rover Discovery he same age mileage, condition and specification as his was on the day he collected it from his dealership, Stuart needs a total of £20,000.
Vehicle Replacement Shortfall Gap Insurance would pay Stuart a second payment of £20,000 which means that he now has the full replacement cost of a like for like Land Rover. Please remember that we do not source vehicles so Stuart can use the money he receives from his Vehicle Replacement insurance policy and his own insurance company ( after he has cleared any finance if needs be ) as he wishes.
After all it is Stuart's money, Stuart's car and we feel that it is important that Stuart decides where when and on what his hard earned money is spent.
What can Return to Invoice Shortfall Gap Insurance do for your Land Rover?
Return to Invoice can pay you the difference between your Land Rover's valuation on the day it is written off and the original invoice price you paid.
If you are paying for your Land Rover through a form of finance agreement, you will be expected to use your funds to clear any outstanding finance you may be liable for, and any remaining funds are yours to do as you see fit.
Lets look at the example of Stuart and what happens when his Land Rover is written of how his Return to Invoice Gap Insurance Policy performs:
Stuart purchases his Land Rover Discovery for £30,000. Three years later, Stuart awakes to find that his Land Rover is no longer on his drive way. Stuart receives £15,000 from his comprehensive insurer, given that this was the market value of his Land Rover at the time it was stolen. Without any form of protection Stuart only has his insurance companies settlement of £15,000 to replace his Land Rover and or clear any Finance. He could use any savings he may have or perhaps agree to extra financial commitments but why?
With Return to Invoice Gap cover, Stuart would receive a second payment for £15,000 which means that he now has the full purchase price back. If Stuart was paying for his Land Rover through a form of finance agreement, after his return to invoice payment he will be expected to pay off any outstanding finance he may be liable for and any money left over is his to do as he sees fit.
What can Contract Hire Shortfall Gap Insurance do for your Land Rover?
Contract Hire Shortfall Gap Insurance can pay you the difference between your Land Rover's value on the day it is written off and the amount that you have outstanding on your finance or contract hire agreement.
This will then allow you to walk away from the finance agreement without any financial liabilities.
Please take a look at Stuart and what happens when his Land rover Discovery is written off and how his finance gap insurance policy performs.
Stuart takes out a four year finance agreement in order to purchase his Land Rover. However two years later, Stuart awakes to find that his Land Rover has been stolen. Stuart receives £15,000 from his comprehensive insurer. Stuart receives a settlement letter from his finance company which even after his own insurance company have paid them means that there is still £4895 to pay. Without any form of cover Stuart is still liable for this amount. Without any form of protection Stuart is now left in the position of having no Land rover to use, and having to use what ever saving he has to clear the finance from his old car.
Contract Hire Gap Insurance would pay the difference between Stuart's Land Rover's value on the day it was written off and his outstanding finance. ( please note that Stuart's policy would not cover any late payment charges or arrears)
Yes Stuart still has no Land Rover, yes Stuart will have to find a deposit or advanced rental for another car however, at least now he is not left in the horrendous position of having to pay for a vehicle he no longer has.
Motor insurance experts claim that the average vehicle can depreciate by up to 50% within the first three years. To put this into context, it is very likely that your Land Rover may lose as much as half of its original value by the time it reaches its third birthday.
We understand that drivers do no want to hear about depreciation, given that they will have just paid a large sum for their Land Rover and now told that half of this sum will practically disappear within three years.
As you may already know, your comprehensive insurer will only pay you the market value of your Land Rover at the time it was written off or stolen. If you take into account the above statement, this amount can be considerably less than what you originally paid for your Land Rover.
Shortfall Gap Insurance can provide you with financial protection against Land Rover depreciation.
We have put together a number of examples to help you recognise the importance of protecting your finances with Shortfall Gap Insurance. We have used figures provided to us from 'What Car', who provide historical and current data and predict what your Land Rover may be worth in one, two, three and four years time.
Example 1 –
Land Rover Discovery 4x4 3.0 SDV6 255 GS 5dr
Invoice price you paid - £38,850
Year 1 – £34,472
Year 2 – £28,617
Year 3 – £23,792 – You will see that within the first three years, your Discovery has lost £15,058
Year 4 – £20,614 – You will see that within the first four years, your Discovery has lost £18,236
Example 2 –
Land Rover Freelander 4X4 2.2 eD4 150 HSE 2WD
Invoice price you paid - £33,905
Year 1 – £24,632
Year 2 – £20,452
Year 3 – £16,976 – You will see that within the first three years, your Freelander has lost £16,929
Year 4 – £14,708 – You will see that within the first four years, your Freelander has lost £19,197
Example 3 –
Range Rover 4X4 3.0 TDV6 Autobiography 5dr
Invoice price you paid - £87,910
Year 1 – £75,840
Year 2 – £62,961
Year 3 – £52,280 – You will see that within the first three years, your Autobiography has lost £35,630
Year 4 – £45,335 – You will see that within the first four years, your Autobiography has lost £42,575
Example 4 –
Range Rover Evoque 4X4 2.0 Si4 240 Dynamic 4WD 5dr
Invoice price you paid - £40,510
Year 1 – £31,962
Year 2 – £26,558
Year 3 – £22,558 – You will see that within the first three years, your Evoque has lost £18,452
Year 4 – £19,109 – You will see that within the first four years, your Evoque has lost £21,401
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Land Rover is a British automobile manufacturer, which was founded in 1948. It is currently owned by Tata Motors, India's largest automobile manufacturer. The history of Land Rover dates back to its founder Maurice Wilks in 1948. Wilks was a proud owner of an old, beaten up American Jeep, which he would drive around his home in Wales. When the jeep eventually went bust, he was unable to replace it which allowed him to identified a gap in the British market for such a vehicle. Wilks would go on to set up the Land Rover company, which would become to this day, the second oldest four wheel drive manufacturer after the American World War Two Jeep.
Unlike the American Jeep that used steel, Wilks would take advantage of the significant post war stock of Aluminium which would make Land Rover's resistance to corrosion. Land Rover would enter the industry with great success until it began to experience financial difficulties in the 1960's. The company was first taken over by the British Leyland Motor Corporation in 1967, British Aerospace in 1988, BMW in 1994, Ford in 2000 and then Tata Motors in 2008.
In 1970, the popular Range Rover series was introduced. Land Rover's headquarters are in Warwickshire and they have two production facilities in Liverpool and Birmingham. Current owners, Tata Motors have announced it intends to start production in China and also Saudi Arabia, which are two emerging markets for the company. The company also provides vehicles for both the UK and US militaries who have notably used them in previous conflicts such as Iraq and Afghanistan.
Over the past 20 years, the company has diversified into new markets such as bicycles and pushchairs. In 2005, the company set up Land Rover coffee and underwent a coffee programme in Costa Rica. The programme involved Costa Rican farmers exchanging their tradition ox carts for Land Rover's. The current portfolio consists of the following successful models: Defender, Freelander 2, Evoque, Discovery 4, Range Rover Sport and the All New Range Rover.