What can Gap Insurance do for your Mazda?
If in the unfortunate case your Mazda is written off or stolen, in partnership with your comprehensive insurer, Gap Insurance can, depending on the level of cover you chose, either return you to the original invoice price you paid for your Mazda (Return to Invoice), pay you the replacement cost of your Mazda (Vehicle Replacement) or pay any outstanding finance that you may have on your finance agreement (Finance and Contract Hire).
Before you read the examples, please consider the following facts:
In the UK each year, an estimated 600,000 vehicles are written off
The average vehicle can depreciate by up to 50% in the first three years.
Your comprehensive insurer will only ever pay you the market value of your Mazda at the time it was written off or stolen.
Vehicle Replacement Gap Insurance for your Mazda will pay the difference between your motor insurer's valuation on the day it is written off and the amount necessary to be able to purchase the same standard of Mazda again, Age, Mileage, Specification etc, that you originally drove away from the showroom in.
This takes into consideration that your Mazda will probably appreciate in price, over a particular amount of time. If your original Mazda model is not available, then you will be awarded with the amount necessary to be able to purchase the superseding model.
You will then have the correct amount of money to be able to purchase your Mazda again, or if you acquired your car through finance, this will allow you to clear any outstanding payments to your finance company and to do with the remaining funds in the middle, what you see fit.
The below example should help with your understanding of Vehicle Replacement Insurance
Simon purchases a Mazda MX5 for £20,000. Three years later, his Mazda is written off as a result of a motoring accident. Simon receives £10,000 from his comprehensive insurer, given that this was the market value of his Mazda at the time it was written off. Simon is informed by the local Mazda dealership that the invoice price of his Mazda model has increased by £5,000.
Without any level of Gap Insurance, Simon will have no option but to use his own savings to purchase another vehicle and/or to clear any outstanding finances.
Vehicle Replacement Gap Insurance will pay Simon the £15,000 necessary to be able to buy the same standard of Mazda again. This leaves Simon with the correct amount of money to be able to purchase his car again, or if his Mazda was acquired on finance, to clear any outstanding balance and then do with the remaining funds what he sees fit.
Is Return to Invoice Gap Insurance the best level of cover for your Mazda?
Return to Invoice Gap Insurance pays the difference between your Mazda's valuation on the day it is written off and the original invoice price you paid.
Simply explained if your Mazda is written off between your two insurance companies you are paid back the full purchase price. From this if you have paid for your Mazda with cash then the whole amount is yours to spend how you see fit. If instead your paid for your Mazda using a form of finance then you will need to clear any finance outstanding then the balance of the funds, the deposit you have paid and the equity that you have generated while making your payments is yours to do with as you wish.
Please see the below example of Simon and how his return to Invoice policy performs when his Mazda is written off.
Simon purchases a Mazda MX5 for £20,000. Three years later, his Mazda is written off as a result of a motoring accident. Simon receives £10,000 from his comprehensive insurer, given that this was the market value of his Mazda at the time it was written off.
Without any level of cover, Simon will have no option but to use any savings he may have in order to be able to purchase another vehicle and/or to pay off any outstanding finance.
With Return to Invoice Gap Insurance, Simon will be awarded the £10,000 necessary on top of his motor insurance, to take him back to the original invoice price he paid. This leaves Simon in the same financial situation as he was originally in, with the correct amount of money to spend on what he wishes. If Simon had acquired his Mazda through the form of a financial agreement, he can now clear any outstanding finance and do with the remaining funds as he sees fit.
Why should you buy Finance and Contract Hire Gap Insurance for your Mazda?
Finance and Contract Hire Gap Insurance will pay the difference between your Mazda's valuation on the day it is written off or stolen and the total amount you have outstanding on your finance agreement. Simply put, it is designed to make sure that should your Mazda be written off that you can walk away from your old finance agreement without any liabilities.
Please see the example of Simon and his Mazda and see how Finance and Contract Hire Shortfall Insurance protects him when his Mazda is written off:
Simon takes out a four year finance agreement.
Three years later, Simon awakes to find his Mazda is no longer in the drive way and is informed that it has been stolen.
Simon is paid a settlement payment by his comprehensive insurer, which is based on the market value of the Mazda at the time it was written off or stolen.
However, even after this payment has been taken care of, there is still £5,000 left outstanding on Simon's finance agreement which he is legally bound to pay.
Without any level of cover, Simon will have no option but to use his own savings or even take out a bank loan to clear this outstanding finance,or worse be left paying for a Mazda that he no longer has.
Contract Hire Gap Insurance in this example would pay the £5,000 meaning that he can walk away from his old Mazda with no further financial liability.
Industry experts claim that the average vehicle can depreciate by up to 50% in the first three years. To put this into context, it is very likely that your Mazda will only be worth half of what you originally paid three years ago.
We at Shortfall.co.uk understand that no driver, whatsoever wants to hear about depreciation. If you have just paid a large amount for your Mazda, you do not want to be told that half of this amount will practically disappear by the time it reaches its third birthday. However, we believe that it is important to make you aware of Mazda depreciation in order to show you the importance of Gap Insurance.
On this page we have drawn together a number of Mazda depreciation examples. In these examples we use figures taken from 'What Car', which provided historical and current Mazda data in order to predict what your Mazda can be worth in one to four years time.
Example 1 –
Mazda MX-5 Coupe Cabriolet 2.oi Sport Tech 6spd 2dr
Invoice price you paid - £23,095
Year 1 – £15,291
Year 2 – £12,580
Year 3 – £10,344 – You will see that within the first three years, your MX-5 model has lost £12,751
Year 4 – £8,838 – You will see that within the first four years, your MX-5 model has lost £14,257
Example 2 –
Mazda CX-5 Crossover 2.0 Skyactiv-G 165 SE-L Nav
Invoice price you paid - £21,995
Year 1 – £15,575
Year 2 – £12,924
Year 3 – £10,749 – You will see that within the first three years, your MX-5 model has lost £11,246
Year 4 – £9,299 – You will see that within the first four years, your MX-5 model has lost £12,696
Example 3 –
Mazda 2 Hatchback 1.3 75 TS AC 3dr
Invoice price you paid - £10,495
Year 1 – £7,375
Year 2 – £6,075
Year 3 – £4,950 – You will see that within the first three years, your has lost £5,545
Year 4 – £4,250 – You will see that within the first four years, your has lost £6,245
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Mazda is an automobile manufacturer that was founded in 1921 in Hiroshima, Japan. The company was originally founded as Toyo Cork Kogyo. It is all in the name as the company was a prominent producer of cork. It would continue this production up until 1931 when it began automobile production and would adopt the name Mazda. The name Mazda originates from the company’s founder Jujiro Matsuda. The name also derives from the Asian God of wisdom, intelligence and harmony, who is known as Ahura Mazda.
The first built car was a small 3 wheel truck known as Mazda go. The company's factory to the surprise of many, was one of only few buildings in Hiroshima that survived the infamous American atomic bomb in 1945. In 1958, the company introduced the Romper model, which was the first mass produced 4 wheel truck that contributed enormously to Japan's post war reconstruction effort. In 1960, the company introduced the R360 Coupe model, which was the company’s first 2-door passenger car which came to be a great success in Japan. This success was prolonged by the Cosmo Sport 110S, which was the company's first rotary engine in which it received worldwide recognition for.
From 1979 to 2010, Ford acquired a large stake in Mazda, which allowed for significant investment to be made that successfully modernised the Asian manufacturer. The two companies currently remain in a partnership. The company reached its ten millionth car in 1985. However it was not until 1989 when Mazda would introduce the legendary MX-5 sports model, which would go on to be the company’s most successful model. The MX-5 would appear in the Guinness World Records in 2002 as the bestselling roadster of all time.
The company has an impressive track record on the production of fuel-efficient vehicles with enormous investments made from 1980 onwards. In 2007, the Asian manufacturer introduced the HyNor project that aims to provide Europe with zero Co2 emissions cars. The company is one of the market leaders in 'green' car production. Mazda’s current portfolio consists of the following successful models: Mazda2, 3, 5, 6, CX-5, MX-5, Mazda2 Venture,MX-5 Kuro, MX-5 Venture.