Shortfall Gap Insurance can protect you, your Saab and most importantly your finances, if in the unfortunate case your Saab is written off or stolen.
As you may already be aware, your comprehensive motor insurer would only ever pay out the market value of your Saab on the day it was written off or stolen.
Due to market value depreciation, this settlement could be a fraction of the price you paid for the vehicle and could leave you with a number of financial implications and even with the inability to purchase a new car.
However, this is where Gap Insurance from Shortfall can help you.
Here at Shortfall, we are proud to state that all of our policies are genuine, tried and tested levels of cover and have been subject to a range of awards for both quality and cost throughout the years.
Gap Insurance can cover the difference between your Saab's valuation on the day it is written off or stolen and either, the original invoice price you paid for the vehicle (Return to Invoice Gap Insurance), the average cost to replace your Saab with the same model, mileage and specification as yours was on the day of purchase (Vehicle Replacement Gap Insurance) or simply the outstanding finance you have remaining on the vehicle ( Finance and Contract Hire Gap Insurance)
Return to Invoice Gap Insurance, Vehicle Replacement Gap Insurance and Finance and Contract Hire Gap Insurance are the three different levels of cover available for you to choose from, however, all of which operate in different ways to ensure that all circumstances can be covered for different individuals. In the following example, we will explain how the three different levels of cover work and operate, we will do this using Laura and her Saab 9.5 of which she paid £15,000.
An estimated total of 600,000 vehicles are written off in the UK each year, with just over 100,000 of them being stolen.
Motor trade experts predict that the average vehicle will lose up to half of the vehicles original value within the first three years of ownership.
During the average 24 hours in the UK, a total of 1369 vehicles are reported to the Metropolitan Police and added to the stolen vehicles register.
Vehicle Replacement Gap Insurance is said by many in the industry to be the highest and most comprehensive level of cover, due to the policies ability to cover the inflation of the cost of a new Saab, as well as any depreciation in value your Saab model may experience during ownership.
Vehicle Replacement Gap Insurance will cover the financial shortfall between the market value of yoru Saab on the day it was written off or stolen and the average cost to replace the Saab with the same model, mileage, specification as yours was on the day of purchase. This will therefore result in any outstanding finance you have being cleared, if any at all, and the full balance, deposit and equity is yours to do with what you please.
Due to the somewhat rarity of a Saab dealership in the UK, if your Saab model is has been replaced and ceases to be produced, Vehicle Replacement Gap Insurance will base the replacement cost on any superceeding model in the Saab range and if no model did superceed your model then the replacement cost will be based on the nearest competitor in the market.
Below is a step by step example of how Vehicle Replacement Gap Insurance would work for your Saab :
On the 10th of August 2013 Laura has purchased a brand new Saab 9.5 for £15,000.
After a loyal and reliable three years of ownership, Laura is involved in an unfortunate accident which saw the 9.5 model written off by the insurer.
Laura receives a figure of £7,500 from her comprehensive insurer which is the estimated market value of the vehicle in the three years time.
The average cost of a Saab 9.5 has risen along with general inflation to the impressive figure of £19,000 which is a £4,000 increase to the price Laura paid three years ago.
This will leave Laura with a financial shortfall of £11,500 to replace the 9.5 with the same model, specification and mileage as hers was on the day of purchase. The £11,500 would be the figure of which Shortfall Vehicle Replacement Insurance would pay, depending on the claim limit of which Laura chose.
Why Buy Return to Invoice Gap Insurance for your Saab?
Return to Invoice Gap Insurance is said to be the most popular form of Gap Insurance due to the level of exposure the cover receives within dealerships across the country. Return to Invoice operates in a similar way to that of Vehicle Replacement Gap Insurance, but will only cover you up to the invoice price you paid for the vehicle, rather than the replacement cost.
Put simply, Return to Invoice Gap Insurance will cover the financial shortfall that is the difference between the market value of your Saab on the day it was written off and the original invoice price you paid for your Saab. This will result in you being returned to the full invoice price of which you paid for the vehicle, with any outstanding finance being cleared, if any, and the full balance, deposit and equity is yours to do with what you please.
Below is a step by step example of how Return to Invoice Gap Insurance will operate ...
As used in the previous example, Laura has of course purchased a brand new Saab 9.5 for £15,000 alongside a Return to Invoice Gap Insurance policy rather than a Vehicle Replacement Gap Insurance policy. Three years later, Laura wakes up to a 9.5 less driveway as the vehicle has been stolen. Several days later, Laura receives a settlement of £7,500 which is the estimated market value of the vehicle on the day it was written off.
This will leave her £7,500 short of the original invoice price of which she paid for the vehicle and could possibly leave Laura with an outstanding financial balance to clear. However, as Laura has purchased a Return to Invoice Gap Insurance policy with Shortfall, between both her comprehensive motor insurer and her Shortfall Gap Insurance Laura is returned to the invoice price she paid for the vehicle.
Resulting in any outstanding finance being cleared, if any, and the full deposit, balance and equity is hers to do with what she wishes. Whether that be the purchase of a new Saab or a new electric Nissan Leaf or even a holiday, what Laura can be sure of is that she is left with no financial strings or attachments to a car she doesn't have.
Finance and Contract Hire Gap Insurance is said to be the first and most originating form of Gap Insurance and in fact many still call it Gap Insurance itself. As you may already be aware, in the event of you writing off your Saab model you could be left with a certain amount of outstanding finance.
Finance and Contract Hire Gap Insurance will cover the financial shortfall which is the difference between the market value of your Saab on the day it was written off or stolen and the outstanding finance of which you have remaining on the vehicle.
Please see the below example of Laura and her Saab which we have designed to assist you with your understanding of how Finance and Contract Hire Gap Insurance can protect you and your Saab:
Laura purchased her £16,000 Saab 9.5 due to part exchanging her previous car and placing a £500 deposit on the vehicle, as well as financing the remaining £15,000 over a five year period.
Two years later, Laura is involved in an unfortunate accident which saw the Saab written off.
Laura then received the market value of the Saab, which is estimated to be in the region of £8,500.
After paying two years worth of finance and receiving the £8,500 settlement along with the deposit, Laura would still owe the finance company £1,400.
However, rather than Laura having to find the £1,400 to pay the finance company, she purchased a Finance and Contract Hire Gap Insurance policy which covered the oustanding amount allowing Laura to walk away with any financial strings or attachments.
As you can see in this case Laura has placed a £500 deposit on the Saab 9.5 of which she cannot be returned. However, if Laura wished to cover her deposit as well as any outstanding finance she could have chosen a higher level of cover in the form of Return to Invoice Gap Insurance.
Saab AB was originally founded in 1937 for the purpose of manufacturing airplanes and defence equipment to protect Sweden’s neutrality during the Second World War. However post war, the company began to struggle because of limited demand for its products. Saab AB therefore decided to diversify into the automobile market.
The company’s first car was the Saab 92, which many in the auto industry claimed resembled an aircraft wing (to no surprise considering the company's past history). The 92 model was later developed into the 93 and the 96 models. All of which enjoyed relative success. To expand its opportunities, the company merged with its Swedish counterpart Scania-Vabis AB, which allowed it to enter new markets and introduce new models.
In 1989, American auto giant, General Motors acquired a stake in the company and in 2000 made it a wholly owned subsidiary. However because of limited success, General Motors considered entirely folding the brand. 2000 onwards would be the start of Saab’s long, depressing decade. The company would from now on be the topic of discussion in many potential buy out meetings, which the majority would fall through in the last few days, for example with companies from Norway, China and Holland. In 2010, the company was bought by a Luxemburg company, literally days before General Motors would decide to close the brand down.
In 2012, Saab would finally final for bankruptcy after a gruelling ten years, however again would be saved by a deal between companies from China and Japan, in a partnership known as the National Electric Vehicle Sweden. Saab holds a Royal Warrant on behalf of the King of Sweden. Saab currenly has a limited model portfolio as it only resumed production in March 2013. The company, now called Electric Vehicle Sweden aims to invest greatly in green cars and has also announced it is working on a new sports car.