If you have taken out a contract hire or lease agreement, you will usually put down a deposit (also known as an initial rental) before you start paying for the vehicle monthly. The more deposit you pay, the less your monthly rentals will be, so some drivers opt for a higher deposit to keep their monthly spending low. However, if the vehicle is declared a total loss, the deposit would be lost and the driver would need to pay again for a new car under a new contract. This is where deposit protection, also known as initial rental cover, with ALA comes in.
In this guide, we will explore the basics of contract hire GAP insurance, as well as how you can recover your deposit should your vehicle be written off or stolen. We will also look at the benefits of contract hire deposit protection, and how you can add it to your GAP insurance policy.
If your leased car is declared a total loss, Guaranteed Asset Protection (GAP) insurance with ALA will cover up to 100% of the outstanding rental payments and will cover any shortfall in the market value settlement that your car insurance company provides. A Contract Hire GAP Insurance policy is available for up to five years and will pay up to £250 of your comprehensive insurance excess that you have to pay towards your motor insurer.
GAP coverage on a Contract Hire GAP insurance policy can be bought up to 365 days after the delivery of your vehicle, and we can make any amendment to your policy free of charge. However, your deposit is not automatically covered under a GAP insurance policy. In order to cover your deposit, you will need to choose your cover amount when building your quote. To start building your bespoke GAP insurance quote, you can visit our website here.
Yes, GAP insurance can cover your lease deposit, but not automatically. When building your Contract Hire GAP Insurance quote, you must state when you bought your vehicle (or when it was delivered), its current mileage and its age, as well as its estimated vehicle price. You should also mention the make of the vehicle, how many years of cover you need, and the amount you are paying in monthly rentals.
From here, you can choose whether you would like deposit protection. At ALA, we can cover up to a maximum of £3000 when you choose deposit cover. This way, your GAP insurer will clear you of any debt to the leasing company and will also provide you with a little extra to cover your initial rental.
By adding deposit protection to your GAP insurance policy, your premium will increase slightly. However, there are various benefits that make deposit protection worthwhile.
If you don’t cover your initial deposit, your leased car will still be covered should it be declared a total loss, as up to 100% of your outstanding rentals will be paid when you make a successful GAP insurance claim. However, that initial payment you made at the beginning of the agreement will not be accounted for. By opting for initial rental protection, you will be placed in the same financial position you were in before leasing the vehicle, with no financial gap.
Some drivers who lease cars often choose a higher deposit in order to keep their monthly rentals low. Initial rental protection allows you to claim back this amount following a total loss, giving you a little extra financial support. You could also use this payment to fund a new deposit on another vehicle, should you choose to lease again.
We offer deposit protection to all drivers who choose a Contract Hire GAP policy. To find out more, you can get in contact with our team today.
You can add deposit protection to your Contract Hire GAP Insurance policy whilst building your tailor-made quote. Alternatively, you can get in touch directly to discuss your quote and the possibility of initial rental protection. After providing all of the relevant information to build your Contract Hire GAP Insurance quote, you can choose whether or not to include deposit protection.
Deposit protection for car leasing can range from £1000 to £3000, but this is only an optional extra. Adding deposit protection can increase your premium, but not by much. You can start building your quote to see how much you could be paying here.
Here at ALA, our GAP insurance policies can suit a range of vehicles. We also offer a range of optional extras that you can add onto your policy, such as Scratch and Dent Cover and Tyre and Alloy Wheel Insurance. It is easy to build your quote via our website, by simply telling us more about your vehicle, and whether you would like to add deposit protection to your Contract Hire GAP Insurance policy.
To find out more about GAP protection, or to speak to a member of our team, you can contact us here.
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