What is Gap Insurance and how can it work for you and your Nissan?
Gap Insurance is a supplementary insurance policy that runs alongside your own Motor Insurance and ensures that if you are ever in the unfortunate position of having your Nissan written off, either through an accident or theft, that you are not left significantly out of pocket financially.
There are different types of Gap Insurance protection, depending on what you would like your Gap Insurance policy to do. Return to Invoice, will pay the difference between your motor insurer's valuation and the amount you originally paid for your vehicle. Vehicle Replacement Gap Insurance will pay the difference between the motor insurer's valuation and the amount necessary to be able to buy the same standard of vehicle again that you drove away from the showroom in, same age, mileage etc.
Finance and Contract Hire Gap Insurance quite simply pays the difference between your motor insurer's valuation and the remaining balance that is outstanding on a finance agreement, leaving you to walk away in the same financial position as you were in originally. Learning more about these products can help you make the correct decision about which Gap Insurance is best for you and your Nissan.
Before you read the examples, please consider the following facts:
In the UK each year, an estimated 600,000 vehicles are written of
The average vehicle can depreciate by up to 50% in the first three years.
Your comprehensive insurer will only ever pay you the market price of your Nissan at the time it was written off or stolen.
What can Vehicle Replacement Gap Insurance do for your Nissan?
Vehicle Replacement Shortfall Insurance can work in partnership with your comprehensive insurer and protect you against any increase in your Nissan's invoice price.
The invoice price of your Nissan may increase for a range of reasons, most notably, if the government increase VAT, if Nissan introduce an upgraded version of your model or if the cost of certain raw materials increase.
Vehicle Replacement Shortfall Insurance will pay the difference between your motor insurer's valuation at the time your car is written off and the amount necessary to be able to purchase the same Nissan again, same, age, mileage etc. If your Nissan is no longer available, then you will be awarded the amount necessary to be able to purchase the superseding model. You then have the correct amount to be able to purchase your vehicle again, or if your Nissan was acquired through a finance agreement, the amount to clear your outstanding finance and then the amount in the middle to do with as you see fit.
Please see the example of Tom and his Nissan which we have designed in order to help you with your understanding of how Vehicle Replacement can protect your Nissan:
Tom pays £20,000 for his Nissan Juke. Three years down the line, Tom awakes to find that his Nissan is no longer on the driveway. Tom receives £10,000 from his comprehensive insurer, given that this was the market valuation of the Nissan when it was written off. To make matters worse, Tom is informed by his Nissan dealership that his Juke model has increased by £2,500.
This means that without any form of Gap protection, Tom will have no option but to use his own personal savings or even take on extra financial commitments in order to purchase another Nissan and/or to pay off any outstanding finance.
Vehicle Replacement Gap Insurance will top up the motor insurance valuation by £12,500, as this is the amount necessary to be able to replace the vehicle. Tom can now either purchase his Nissan again, or if his Nissan was acquired through a finance agreement, pay his outstanding balance and do with the amount in the middle what he sees fit.
What can Return to Invoice Gap Insurance do for your Nissan?
Return to Invoice Gap Insurance can work in partnership with your comprehensive insurer and return you to the invoice price you originally paid for your Nissan.
Return to Invoice can pay you the difference between what you receive from your comprehensive insurer, which will be the market value of your Nissan at the time it was written off or stolen and the invoice price you originally paid for your Nissan. If you have acquired your Nissan through a finance agreement then you have the correct funds to be able to pay any outstanding balance and then the amount in the middle is yours to do with as you see fit.
To help you with your understanding of how Return to Invoice can protect your finances, please see the example of Tom and his Nissan:
Tom pays £20,000 for his Nissan Juke. Three years down the line, the Nissan is written off. Tom receives £10,000 from his comprehensive insurer, given that this was the market valuation of the Nissan when it was written off.
Without any level of Gap Insurance, Tom may have no option but to use his own personal savings to purchase another Nissan and/or to pay off any outstanding balance he may have on his finance agreement.
Return to Invoice Gap Insurance from Shortfall will pay Tom £10,000 to top up his motor insurer's valuation to the amount he originally paid for his Nissan.
Contract Hire Shortfall Insurance will pay any outstanding balance you may have on a finance agreement, if your car happens to be written off. This leaves you to simply walk away from the situation in the same financial situation as you originally were, leaving you without any financial liabities and allowing you to focus on more important things like looking for your new car or getting better after an accident.
To assist you with your understanding, see the following example of how Finance and Contract Hire Gap Insurance can protect your Nissan:
Tom takes out a four year finance agreement to purchase his Nissan. Two years later, the Nissan is written off. Tom is paid a settlement payment by his comprehensive insurer, which is based on the market value of his Nissan at the time it was written off or stolen.
However, even after this settlement payment, Tom still has £5,000 outstanding on his finance agreement, which he is legally bound to pay.
Without any form of gap protection, Tom may have no option but to use his own personal savings or even take on extra financial commitments to clear this outstanding £5,000 balance.
Every vehicle can depreciate. Experts in the motoring industry say that the average vehicle can depreciate by up to 50% in the first three years of ownership. To put this into context, it is very likely that your Nissan may lose as much as half of its original value by the time it reaches its third birthday.
We believe it is extremely important to inform drivers of how drastically their vehicles may depreciate and allowing them to be fully aware of how important it is to protect their purchase with Gap Insurance.
We have drawn up a number of examples of depreciation. In these examples, we have taken figures from 'What Car', who provide historical and current Nissan data in order to predict what your Nissan can be worth in one, two, three and four years time.
Example 1 –
Nissan Note Hatchback 1.4 Visia 5dr
Invoice price you paid - £11,650
Year 1 – £6,787
Year 2 – £5,572
Year 3 – £4,584 – You will see that within the first three years, your Note model has lost £7,066
Year 4 – £3,900 – You will see that within the first four years, your Note model has lost £7,750
Example 2 –
Nissan Juke Crossover 1.6T Tekna 5dr
Invoice price you paid - £18,495
Year 1 – £12,839
Year 2 – £10,564
Year 3 – £8,643 – You will see that within the first three years, your Juke model has lost £9,852
Year 4 – £7,405 – You will see that within the first four years, your Juke model has lost £11,090
Example 3 –
Nissan GT-R Coupe 3.8 V6 2013 MY Track Pack 2dr
Invoice price you paid - £86,615
Year 1 – £62,207
Year 2 – £51,640
Year 3 – £42,900 – You will see that within the first three years, your GT-R model has lost £43,715
Year 4 – £37,175 – You will see that within the first four years, your GT-R model has lost £49,440
Example 4 –
Nissan 307Z Convertible 3.7 V6 2dr
Invoice price you paid - £32,115
Year 1 – £19,564
Year 2 – £16,109
Year 3 – £13,202 – You will see that within the first three years, your 370Z model has lost £18,913
Year 4 – £11,272 – You will see that within the first four years, your 370Z model has lost £20,843
Example 5 –
Nissan Qashqai+2 Crossover 1.5 dCi 110 Visia 2WD
Invoice price you paid - £19,895
Year 1 – £12,844
Year 2 – £10,584
Year 3 – £8,680 – You will see that within the first three years, your Crossover model has lost £11,215
Year 4 – £7,411 – You will see that within the first four years, your Crossover model has lost £12,484
Nissan Juke Tekna goes on sale in the UK today.
Nissan X Trail Tekna model joins the Juke on sale.
Nissan Juke DCI model joins the extended range of Juke models on offer.
The brand new electrically developed NV200 Combi.
Nissan confirm the release of the brand new Juke Acenta.
Nissan reveal details on the new Pulsar model to be released later this year.
The Pulsar Nismo is revealed for the first time ever at the Paris motor show.
A brand new engine choice available for the Nissan Qashqai in the UK.
As the latest release of the Micra nears we have taken a look into the evolution of the Nissan Micra.
Nissan tease the new Juke R Nismo ahead of a Goodwood reveal this year.
Nissan Motor Company is a Japanese automobile manufacturer, which was founded in 1933. As part of the Renault-Nissan alliance, the company is the world’s sixth largest automaker. The history of Nissan dates back to Masujiro Hashimoto, who originally founded Kwasishinsha Motor Car Works in 1911. By 1914 the company introduced its first car, which was known as the DAT. The company renamed itself DAT Motorcar in 1925.
In 1928, Yoshisuke Aikawa founded the company Nippon Sangyo, which was abbreviated to Nissan on Tokyo's stock market. In 1930, the company would take over DAT Motors and by 1934, the Nissan Motor Company was founded. During the Second World War, Nissan manufacturerd trucks, airplanes and engines for the Japanese war effort. In 1952 it merged with British automaker Austin and in 1996, it merged with fellow Japanese automaker, the Prince Motor Company. It was during this partnership when successful, well known models were introduced, such as the Skyline and Gloria.
Between the years 1993 to 2002, the company partnered with American giant Ford. However because of financial difficulties near to the end of the 1990’s, it joined with French automaker Renault and formed the Renault-Nissan alliance, which would be the first time the two countries have worked together on automobiles. This alliance would be seen by many in the automobile industry as one of the ‘most spectacular corporate turnarounds in history’.
The CEO of Nissan, Brazilian born Carlos Ghosn is credited with this turnaround, considering the company was on the verge of bankruptcy in 1999. To take advantage of its incredible success, German automaker giant Damiler AG acquired a small stake in the company in 2010. Through this partnership with Damiler AG, the two companies are investing in fuel efficent cars. The company also owns Nissan Marine, which manufacturer’s motors for boats. The current portfolio consists of the following successful models: Leaf, Pixo, Micra, Note, Juke, Qashqai, X-Trail, Pathfinder, Navara, 370z and GT.