There are three forms of Gap Insurance, all of which have different capabilities.
The different forms of Gap Insurance will either pay you the difference between your Renault's valuation on the day it is written off and either return you back to the original invoice price you paid for your Renault (Return to Invoice), pay you the cost to replace your Renault (Vehicle Replacement) or pay the total amount that you have outstanding on your finance agreement (Contract Hire/Finance Gap).
Please consider the following facts:
It is estimated that 600,000 vehicles are written off in the UK each year alone.
The average can vehicle depreciate by up to 50% in the first three years.
Your comprehensive insurer will only ever pay you the market value of your Renault at the time it was written off or stolen
What can Vehicle Replacement Shortfall Insurance do for my Renault?
Vehicle Replacement Shortfall Insurance will pay the difference between your Renault's valuation on the day it is written off or stolen and the amount of money you need to purchase another Renault model the same age, mileage, condition and specification as yours was on the day that you first collected it from your dealership.
This will naturally take into account any increase in the invoice price, or model upgraded. In fact if the original Renault model is no longer available, then settlement will be based on the cost of the superseding model.
Please note that if you were paying for your Renault through a form of finance agreement, then you have to settle any outstanding finance balance before purchasing another vehicle.
Lets look at John and how his Vehicle Replacement Shortfall Insurance performs when his Clio is written off:
John pays £10,000 for his Renault Clio. Three years down the line, he awakes to see that his Clio has been stolen. John informs his comprehensive insurer who informs him that they will pay £5,000, given that this was the market value of his Clio at the time it was written off.
To make matters worse, John is informed by the local Renault dealership that the cost to replace his Renault Clio has increased by £1,000 to £11,000. Better specification, better fuel economy but a higher purchase price.
Without any level of Gap Insurance, and without having to delve into any savings John would only have what ever his company have offered in settlement to buy another vehicle and/or clear any outstanding finance left on his old finance agreement.
Vehicle Replacement Gap Insurance will pay John this £6,000 which means that he now has the full replacement cost of a like for like Renault at his disposal, he can clear any finance if need be, allowing him the opportunity to purchase another vehicle.
Return to Invoice Gap Insurance pays the difference between your Renault valuation on the day it is written off, which will be paid by comprehensive motor insurer and the invoice price you originally paid. Simply put, between your two insurance companies you are returned back to the invoice price.
If you are paying for your Renault through a form of finance agreement, then you will be expected to use this Gap Insurance settlement payment to clear any outstanding finance that you may be liable for. If there is any money left over, then that is yours to spend however you see fit.
Please see the example below which we have designed to assist your understanding of how Return to Invoice Gap Insurance can protect your Renault:
John pays £10,000 for his Renault Clio. Three years down the line, he awakes to see that his Clio has been stolen. John is paid £5,000 from his comprehensive insurer, given that this was the market value of his Clio at the time it was written off.
Without any form of Gap protection, John will have no option but to use his own money to purchase another vehicle and/or to clear any outstanding finance.
Return to Invoice Gap Insurance will pay John the further £5,000 on top of his motor insurer's valuation to return him back to the original invoice price he paid.
John is now in the same financial position as he was originally in and able to use this £10,000 however he chooses, if John acquired his vehicle through a finance agreement then he would have to clear any outstanding balance he has and then the remaining funds would be his to do with as he sees fit. With online Return to Invoice Gap Insurance for your Renault, for as little as £39 per year inclusive of IPT, why not pick up the phone and call today, is it really worth the risk?
The above example has been designed to assist your understanding of depreciation and how a Shortfall Return to Invoice Gap Insurance policy can help protect you and your Renault model.
Finance and Contract Hire Gap Insurance is designed solely to allow you to be able to walk away from a finance agreement, in the case of your Renault being written off, with no financial liability and not be left having to pay for a vehicle you no longer have.
Simply put, Finance and Contract Hire Gap Insurance will sit on top of your own motor insurance and if your vehicle was written off, would top up your motor insurer's valuation (which is how much your vehicle was worth at the time of being declared a total loss, with the amount necessary to clear any outstanding balance to your finance company.
Please see the example below of John and his Finance and Contract Hire agreement performs when his Renault is written off.
John takes out a four finance agreement to pay for his Renault Clio. Two years down the line, John’s Clio is written off in a road accident. John is paid a settlement payment by his comprehensive insurer, which is based on the market value of his Clio at the time it is written off or stolen. However, this settlement payment does not clear all of the outstanding finance which John has on his finance agreement, as he still has £2395 left outstanding.
Without any form of Finance or Contract Hire Gap protection, John will have no option but to use his own savings to pay the outstanding £2395.
Finance and Contract Hire Gap Insurance will pay John's finance company the outstanding £2,395.
Every vehicle will depreciate over time, this is a fact. In fact industry experts claim that the average vehicle can lose as much as half of its value within the first three years. To put this into context, it is very likely that it will depreciate by up to 50% within the first three years.
We at Shortfall.co.uk believe that it is important for drivers to be aware of depreciation and how drastic it can be, in order for them to know all the facts before they make their gap insurance decision.
To help you with your understanding of Renault depreciation, we have collected figures from 'What Car', who use historical and current Renault data in order to predict what your Renault can be worth in one, two, three and four years time.
Example 1 –
Renault Scenic MPV 1.2 TCe 115 Dyn. TomTom S/S 5dr
Invoice price you paid - £20,250
Year 1 – £9,224
Year 2 – £7,582
Year 3 – £6,227 – You will see that within the first three years, your Scenic model has lost £14,023
Year 4 – £5,316 – You will see that within the first four years, your Scenic model has lost £14,934
Example 2 –
Renault Megane Coupe 1.2 TCe 115 GT Line TomTom
Invoice price you paid - £20,645
Year 1 – £11,650
Year 2 – £9,575
Year 3 – £7,849 – You will see that within the first three years, your Megane model has lost £
Year 4 – £6,721 – You will see that within the first four years, your Megane model has lost £
Example 3 –
Renault Fluence Saloon Z.E Dynamique 4dr
Invoice price you paid - £23,395
Year 1 – £9,126
Year 2 – £7,493
Year 3 – £6,153 – You will see that within the first three years, your Fluence model has lost £17,242
Year 4 – £5,255 – You will see that within the first four years, your Fluence model has lost £18,140
Example 4 –
Renault Clio Hatchback 0.9 TCe Eco Dyn'que Media Nav
Invoice price you paid - £14,245
Year 1 – £8,175
Year 2 – £6,725
Year 3 – £5,500 – You will see that within the first three years, your Clio model has lost £8,745
Year 4 – £4,699 – You will see that within the first four years, your Clio model has lost £9,546
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Renault is a French automobile company founded in 1898. The company's headquarters are in Boulogne-Billancourt, which is situated in Western Paris. The company has a product portfolio which includes: cars, vans, trucks, tractors, tanks and buses. The most successful models are the Clio and Megane. The company currently operates in 118 countries.
Louis Renault and his two brothers, Marcel and Ferdinand founded the company in 1898 for the purpose of the motor racing industry. The first Renault built model was the Voiturette 1CV. The company achieved recognition through its success in the motor racing industry, in which all three brothers participated in. Marcel lost his life participated in a racing competition.
The company halted domestic production during the First World War and contributed to the allied war effort, which earned Louis a Legion of Honour award. During the Nazi occupation of France during the Second World War, Louis refused to build tanks for the Nazi war effort, which took control over all of the companies factories. The company was instead forced to build lorries for the Nazi movement. As a result, the factories were key targets for the British and American forces, resulting in full destruction of all factories.
When France was liberated, Louis was arrested by the French government and was accused of collaborating with the Nazi forces. The state also took full control over the company. Louis died in prison, awaiting trail. The exact reason for his death has never been known, although Louis's family is still to this day searching for the truth.
The government would control Renault up until 1996. The company partnered with Nissan in 1999 which allowed the company to expand its presence throughout all four corners of the world. The Renault-Nissan alliance is now the fourth largest automotive group. The Renault alliance has taken the lead in developing electric cars in which they are expected to invest up to four billion in the upcoming decade.