Buying a new car is one of the biggest purchases we make throughout our lives. Such significant purchases tend to be preceded by considerable research from consumers, to help them decide what the best possible car for their money is, and to ensure it will meet as many long term needs as possible.
However, all the research in the world will have no impact in the event your car is stolen or involved in an accident which results in it being written off.
It is a sad fact that, despite all the saving and studying you might do prior to choosing your car, you can still fall foul of the actions of others once you actually own it.
Whilst personal safety should of course be everyone’s first priority, particularly after an accident, you may have to think about financial consequences as well if your vehicle is stolen or written off. Therefore, it’s wise to take measures to safeguard your bank balance.
To help you do so, Warranty Direct offers GAP insurance, which can contribute to cover the shortfall that can arise from your comprehensive motor insurer provider’s settlement.
Protect your finances with GAP
In the event of your car being stolen or written off by an act of a third party, there could be a potential for financial loss. The perfect way to guard against this potential financial hit is GAP insurance.
When a car is written off or stolen, the insurer will only pay out the market value of the car at the time of this event. However, in the case of new vehicles, depreciation over the first three years would reduce the value significantly from the initial price paid by the customer. A brand new car can depreciate between 15 – 35%* over the course of the first year and around 50 – 60% over three years, assuming a mileage of around 10,000 a year. So, a £25,000 new family car could be worth as little as £10,000 after three years.
This depreciation could lead to a potential shortfall of thousands of pounds if a claim has to be made, but if you take out GAP insurance, this should not be the case. GAP insurance is designed to cover the financial shortfall that can occur when a motor insurer pays out on a “total loss” claim. This is the term associated with cars that are stolen and not recovered or written-off in an accident.
Warranty Direct is able to offer three types of GAP cover, so before making a purchase it’s important to establish which is best for you.
- Vehicle Replacement Insurance (VRI) will cover the difference between your motor insurer’s settlement value for your car and the cost of a brand new car of the same make, model, and specification. This product is ideal for owners of brand new cars.
- Return to Invoice Insurance (RTI) covers you for the difference between your motor insurer’s settlement value for your car and the original price you paid for your car – the selling dealer’s invoice. This product suits purchasers of “nearly-new” or used cars, which are bought from a garage.
- Return to Value Insurance (RTV) will cover you for the difference between your motor insurer’s settlement and the value of the car at the time you took out your GAP policy. This value is established from long standing and trusted vehicle valuation companies. This product is aimed at people who already own their car but would still like GAP insurance protection.
Like all insurance policies, Warranty Direct’s GAP insurance is subject to terms and conditions**. To find out more, please speak to one our friendly team on 0800 097 8838 or view online.
In addition to taking out GAP insurance, there are other measures that you can take to protect your property, whilst ensuring that your motor insurance cover remains completely valid. The theft of something you own is highly distressing, but it’s also an act whereby you’re immediately incurring a loss. With motoring technology advancing in all aspects in recent years, including security measures, car thieves are always thinking of new ways to commit crime.
In 2016, ukcrimestats.com reported 363,388 instances of vehicle crime***. Whilst this has been much higher in previous years, it’s important for drivers to know that there are measures that can be taken to minimise risk of theft.
There are some obvious precautions that we can all take such as locking your car and hiding your belongings; the amount of car thefts that are instigated by expensive belongings like a sat-nav or tablet being left on the passenger seat is alarming. Hiding them reduces the reasons a thief may break into your car.
There are also several means of adding to the security equipment already in place, such as using steering wheel, gearstick, and/or pedal locks. Whilst these are not always 100% reliable in their actual function, they can often put off a thief because of the extra effort required to disable them. Other useful security measures include trackers that you can fit to your vehicle, and wheel-locking nuts.
With this advice in mind, hopefully you will have enough guidance to help protect the financial and personal investment of your next car purchase – especially during this new registration period.
* Money Advice Service
** Terms and conditions apply, see website for product information.
Warranty Direct GAP Cover Insurance policies are underwritten by LAMP Insurance Company Limited, whose registered office is Suite 934 Europort, Gibraltar, company number 93562. LAMP Insurance Company Limited is licensed and regulated by the Gibraltar Financial Services Commission under the Financial Services (Insurance Companies) Act.
GAP Cover Insurance policies are administered by Warranty Direct Limited, Quadrant House, 20 Broad Street Mall, Reading, RG1 7QE, company number 3233010. Warranty Direct limited is authorised and regulated by the Financial Conduct Authority.
The latest data from Warranty Direct has revealed the brands whose part problems afflicted UK drivers most frequently last year, and how much the repairs have been setting drivers back.
Analysing statistics from over 40,000 policies and more than £3 million-worth of their most recently authorised claims has shown that when examining the total paid claims against all policies*, well over a third of Alfa Romeo (40%) and Porsche (36%) drivers needed to make a claim, whilst 34% of Land Rovers also suffered from faults.
Below are the 10 manufacturer brands which had the highest percentage of claims made against them and the average cost of repairs. Note – the number of claims was measured as a percentage of the number of policies held per manufacturer:
|Make||% of Total Claims Against Total Number of Policies Held Per Make||Average Authorised Claim|
Alfa Romeos are often considered a true driving enthusiast’s car for their quality of performance and style, but they are known for needing frequent trips to the garage, with suspension, electrical and cooling system problems the most frequent cause for claims in 2016.
Maintenance of Porsches was a considerable expense last year, with a claims rate of 36% across policies though, at an average cost of £1,019.07 per repair. Common claims for Porsche owners included suspension and electrical issues, along with steering faults.
Amongst these results, Mercedes-Benz sitting in fifth place, is particularly significant given the brand’s popularity. In 2015 alone the company sold 145,254 units in the UK, which equated to more than 5% of the market share**. However, an average repair cost of £559.99 is the highest after Porsche and BMW.
When assessing the top five manufacturers on the list’s most frequent reasons for a claim, axle and suspension problems were common, along with electrical problems. Although not one of the most regular faults, gearbox repairs came at significant cost and averaged over £1,250 per repair across these top five brands.
The figures also revealed a trend of Japanese manufacturers overtaking European options as the most reliable vehicles on the market. Honda, Subaru, Suzuki and Toyota all had between just 3% and 6% of their policies claimed on throughout the year.
Super-minis and hatchbacks did not receive many claims, largely due to the simplicity of their parts and reduced costs of labour. These included makes such as Smart, Kia, Seat, Ford and Hyundai, all with less than 10% claims being made against their policies. While these vehicle types had fewer claims, a warranty does go some way to covering the unexpected costs for sudden repairs and provides peace of mind to motorists.
Commenting on the latest data, COO of Warranty Direct, Philip Ward, said: “With many cars becoming increasingly more complex in terms of component parts, repair costs will continue to rise throughout 2017. Vehicles which might initially seem reliable and reasonably priced can end up becoming a financial liability for the owner.”
*Includes multiple claims per policy
**Report from Statista – Mercedes-Benz car sales in UK from Jan 14-17.
8 driving tips to reduce costs and protect the environment
Warranty Direct have compiled a list of some of the best ways you can fulfil your eco-driver potential (and save yourself a few pennies as a result!)
You may have heard of the term eco-driving, but not all drivers are aware of its benefits. Put very simply, it can save us all money – both in terms of fuel consumption and wear and tear to our cars. According to a study by Fiat (which included 5,700 drivers in five countries), eco-driving saves an average of 15% of fuel costs* and greatly reduces maintenance expenses.
There could be enormous benefits to the environment too, as air pollution in the form of emissions could be reduced significantly. The European Climate Change Programme calculated a reduction potential of at least 50 million tons of CO2-emissions in Europe, which could save as much as 20 billion Euros if more drivers chose to drive in a slightly more mindful manner.
Eco-driving also reduces noise as well as local air pollution. The engine noise of one car driving with 4000 rpm (revolutions per minute) equals the engine noise of 32 cars at 2000 rpm. Thus, it reduces one of the main issues with traffic in urban areas.
So how can you fulfil your eco-driver potential? Here are a number of things you could try:
According to tyre manufacturer Michelin, underinflated tyres can increase fuel expenditure by up to 6%. The average tank of fuel is priced at around £70, so pumping up your tyres could save around £4 per top-up.
Be a smooth operator
When driving, try to maintain a good distance from the car in front to avoid last-minute braking. Get up to speed as smoothly as possible and keep the gear engaged to achieve fuel reduction. Change to a lower gear when the engine speed drops below 1500 rpm. Conversely, the Energy Saving Trust recommends trying to change up a gear before you reach 2,500 revs in a petrol car, and 2,000 in a diesel car.
Purchase a fuel consumption display
If your car comes with a consumption computer, use it to get instant feedback on fuel use. By using it to adjust your driving habits, you could save up to 10% of fuel. If your vehicle doesn’t have one, they’re easy to install, so it’s not just individuals with fancy vehicles who can reap the benefits!
Don’t go full throttle
The Energy Saving Trust advises drivers to take their foot off the gas when they travel downhill. In most modern cars, this stops fuel being sent to the engine and minimises consumption. Make sure you don’t coast in neutral though, as this reduces driver control. The Trust also reports the most efficient speed you can travel in a car, in terms of achieving the best fuel economy is 55-65mph. Any faster, though, and the fuel efficiency decreases rapidly. For example, driving at 85mph uses 40% more fuel than at 70mph (oh, and it’s illegal too).
Allow yourself to skip gears when road conditions permit. For example: by shifting straight from third to fifth, you’ll minimise wear and tear on your car’s transmission and save on fuel. Similarly, when slowing down, bypass shifting through each gear individually.
Combine trips and plan ahead
Trips under 5 km are the most polluting, due to the engine and the pollution control system never reaching maximum operating temperature. Merging several trips into one can cut fuel use and emissions by 20 to 50%. Look ahead at the travels news, to prevent travelling during the busiest periods of traffic. Stop-start driving is among the most fuel intensive forms of car travel.
Don’t be a drag and travel light
Remember to remove roof stacks from your vehicle, when they’re not in use to make your car as aerodynamic as possible. You’ll be surprised at the difference it makes to fuel economy, as every extra hundred pounds reduces efficiency by up to 2%. Empty your boot of unnecessary items and close your windows if travelling more than 50mph – this also reduces drag.
Switch off your engine in traffic
If your vehicle has a start/stop feature and you’re at a standstill for more than a few minutes, turn off the engine. Not only will this prevent unnecessary fuel consumption but it’ll make for a more pleasant wait. Even as little as fifteen seconds can save fuel, just make sure you don’t switch off your concentration as well!
So why not take advantage – save yourself some money and help protect the environment? If Eco-driving becomes the norm rather than the exception, it has potential to drastically decrease emissions from transport and boost road safety.
* Information from Treehugger article – March 2011