What is Gap Insurance for Mitsubishi?
Gap Insurance is a type of Insurance, that sits on top of your own Motor Insurance. Gap Insurance ensures that if you are in the unfortunate position of having your Mitsubishi written off due to you being involved an an accident or being the subject of vehicle theft, that you are not left financially out of pocket.
Shortfall Policies are some of the most comprehensive that are available in the United Kingdom today and although they cannot stop your Mitsubishi being stolen or you being involved in an accident, they can be relied on if you ever do find yourself in this unfortunate position. Shortfall Policies can at least take some of the financial strain off your shoulders and let you get on with more important things like getting better, or searching for your new car.
If your Mitsubishi was declared a total loss, then Shortfall Insurance, will pay the difference between your Mitsubishi's valuation on the day it was written off and, depending on what type of gap protection you decide on, either return you to the original price you paid for yur vehicle, clear any finance you have outstading, or pay the amount necessary for you to be able to purchase a Mitsubishi of the same standard, age and mileage that you originally drove away from the showroom in. Essentially, Shortfall Insurance sits on top of your motor insurance, to make sure that you are never in a financially devestating position of being thousands of pounds out of pocket.
If you are looking for Gap Insurance protection for your Mitsubishi, then on this page you can read about Return to Invoice, Vehicle Replacement and Contract Hire Gap Insurance Products to decide on which is best for you and your Mitsubishi.
Here are some road facts that may interest you when making your decision:
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, including your Mitsubishi
Your Motor Insurer will pay you with the amount your Mitsubishi is valuated at on the day it is declared a total loss, due to depreciation, this is likely to be a lot less than it was originally worth.
Vehicle Replacement Shortfall Insurance is designed to protect you against any increase in the original invoice price you paid for your Mitsubishi.
The original invoice price of your Mitsubishi can increase for a number of reasons, for example if the government decide to increase VAT, if Mitsubishi introduce an upgraded version of your model which consequently pushes up the invoice price of yours or if the cost of certain raw materials increase.
Vehicle Replacement can pay you the difference between your Mitsubishi's valuation on the day it is written off or stolen (which will be paid to you by your comprehensive insurer) and the amount you now need to purchase another Mitsubishi, the same age, milleage and condition as yours originally was when you first drove it out of the show room. If your original model is no longer available, then you will be paid the relevant funds to be able to purchase the superseding model.
Sophie purchases a Mitsubishi Shogun for £30,000. Three years later, Sophie awakes to find that it has been stolen. Sophie receives £15,000 from her comprehensive insurer, given that this was the market valuation of her Mitsubishi at the time it was stolen. Sophie is informed by her Mitsubishi dealership that her Shogun model has increased by £5,000 because of an increase in VAT.
Without any form of protection, Sophie will have no option but to use her own savings or even take on extra financial commitments to purchase another Mitsubishi and/or to pay off any outstanding finance she may have.
Vehicle Replacement Shortfall Insurance will pay Sophie the £20,000, which is the amount necessary to purchase another Mitsubishi, same, age, mileage etc. Sophie can either now purchase another Mitsubishi or clear any finance that may be outstanding and then do with the remaining funds what she sees fit.
What can Return to Invoice Gap Insurance do for your Mitsubishi?
Return to Invoice can work in partnership with your comprehensive insurer and depending on, however, you paid for your Mitsubishi, return you to the original invoice price you paid for your Mitsubishi or clear any outstanding finance that you may be liable for. In other words, Return to Invoice Gap Insurance can pay you the difference between your Mitsubishi's valuation on the day it is written off or stolen and the invoice price you originally paid for your Mitsubishi. If you are paying for your Mitsubishi through a form of finance agreement, you are expected to use your Gap Insurance settlement o clear any outstanding finance.
Sophie purchases a Mitsubishi Shogun for £30,000. Three years later, Sophie awakes to find that it has been stolen. Sophie receives £15,000 from her comprehensive insurer, given that this was the market price of her Mitsubishi when it was stolen.
Without any form of Shortfall protection, Sophie will have no choice but to use her own savings or even take on extra financial commitments in order to purchase another Mitsubishi and/or to pay off any outstanding finance.
Return to Invoice Shortfall Insurance will pay Sophie this £15,000 which will return Sophie to the invoice price she paid for her Mitsubishi. If Sophie was paying for her Mitsubishi through a form of finance agreement, she will be expected to clear any outstanding finance and what ever money left over, is Sophie's to do with how she sees fit.
The above illustration has been designed to inform and explain the effects of market value depreciation and what it could do to your finances. As you can see, above is an example of a Mitsubishi Shogun and how its market value depreciation could effect your finance and how a Shortfall Return to Invoice Gap Insurance policy can help you and your Mitsubishi.
How can Finance and Contract Hire Gap Insurance protect your Mitsubishi?
Finance and Contract Hire Gap Insurance literally pays the difference between your motor insurance valuation on the day your Mitsubishi is written off and the amount of finance that is outstanding on your agreement.
Finance of Contract Hire Gap Insurance can help if you have a Contract hire agreement, Finance Agreement or a Hire Purchase Agreement amongst any other form of financial agreement involved in the purchase process of the Mitsubishi model.
Please note that if you have any arreas or late payment charges, then these will be deducted from the settlement.
Sophie takes out a four year finance agreement.
Three years later, Sophie awakes to find that her Mitsubishi has been stolen.
Sophie receives a settlement payment from her comprehensive insurer which is based on the market value of her Mitsubishi at the time it was stolen.
However, even after this payment has been made, there is still £5,000 outstanding on the finance agreement, which in theory, Sophie is legally bound to pay.
Without any form of Gap protection, Sophie will have no option but to use her own savings, or even take on extra financial commitments in order to pay this outstanding balance.
Finance and Contract Hire Gap Insurance will top up your motor insurer's valuation with the amount necessary to cover any outstanding balance that remains on the finance agreement. This leaves you in the same financial position as you originally where, without devestating financial consequences.
Remember, that if you can eventually own your car, through Hire Purchase, you can explore Return to Invoice and Vehicle Replacement Gap Insurance too.
Industry experts claim that the average vehicle can depreciate by up to 50% within the first three years. In other words, it is very likely that your Mitsubishi may lose as much as half of its original value by the time it reaches its third birthday.
Although this may seem like a shocking factor, it is also a true one.
On this page, we have drawn up three examples of Mitsubishi deprecation. In these examples we use historical and current Mitsubishi data provided to us by 'What Car', who predict what your Mitsubishi will be worth in one, two, three and four years time.
Example 1 –
Mitsubishi Shogun 4X4 3.2 Di-DC SG2 3dr
Invoice price you paid - £30,774
Year 1 – £15,695
Year 2 – £12,894
Year 3 – £10,611 – You will see that within the first three years, your Shogun model has lost £20,163
Year 4 – £9,063 – You will see that within the first four years, your Shogun model has lost £21,711
Example 2 –
Mitsubishi I Hatchback MiEV 5dr
Invoice price you paid - £29,045
Year 1 – £10,468
Year 2 – £8,621
Year 3 – £7,067 – You will see that within the first three years, your Hatchback model has lost £21,978
Year 4 – £6,033 – You will see that within the first four years, your Hatchback model has lost £23,012
Example 3 –
Mitsubishi Shogun 4X4 3.2 Di-DC SG3 auto 5dr
Invoice price you paid - £39,474
Year 1 – £22,141
Year 2 – £18,198
Year 3 – £14,965 – You will see that within the first three years, your Shogun model has lost £24,509
Year 4 – £12,797 – You will see that within the first four years, your Shogun model has lost £26,677
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Mitsubishi Motors Corporation is a Japanese automobile manufacturer, which was founded in 1970. The company is currently the sixth largest automaker in Japan and the sixteenth largest of such in the world. It is part of the Mitsubishi Group that consists of a wide range of multinational corporations who operate in a range of sectors including, breweries, electrics, properties, chemicals, insurance and banking services and aircraft, oil and paper production.
The company currently has manufacturing faculties in Japan, Philippines, Thailand, America and Brazil. The name Mitsubishi originates from the Japanese words “mitsu”, which means three and “hishi”, which means water chestnut that is often referred to as a diamond in Japan. The history of the company dates back to the Mitsubishi Heavy Industries Company in 1934 that manufactured aircrafts and ships.
In 1937 it introduced its first automobile, which was known as the PX33 model and was used for military purposes. It was the first Japanese built passenger car with full time four-wheel drive. By the 1950's, it was a well-established automobile company and was able to take advantage of Japan’s growing economy and middle class with the introduction of its first mass market sedan, the 500 model. The company became a separate entity of Mitsubishi Heavy Industries in 1970.
The company has a long partnership with movie star Jackie Chan, who famously uses Mitsubishi cars in his successful action films. It also sponsors the Jackie Chan Cup, which is an annual celebrity racing competition. In 2005 the company introduced the Jackie Chan Limited Edition model of the Lancer Evo IX. Only 50 were built. The company also helped form the Mitsubishi Motors Mitushima Football Club who play in Japans Division 1.Mitsubishi's automobile portfolio consists of the following successful models: The Range, ASX, Colt, Evolution X, i-MiEV, L200, Lancer, Mirage, Outlander and Shogun.