Jan 262018
 

Analysis of the latest figures from Warranty Direct’s GAP insurance division has revealed an alarming increase in claims for car thefts and write-offs over the past three years.

Warranty Direct’s findings show claims for write-offs have proportionally risen by 55% since 2014. This has resulted in a considerable cost to both the insurer and consumer.

The average individual claim value for vehicles written-off over the three-year period was £3,765 with some of the highest individual claims being over £15,000.

Manufacturer Percentage of overall claims Average claim value Highest claim
1. BMW 17% £4,286 £15,364
2. FORD 17% £2,377 £6,200
3. MERCEDES-BENZ 11% £5,165 £13,320
4. VAUXHALL 11% £2,347 £6,895
5. AUDI 4% £4,905 £9,740

 

When analysing manufacturer trends, the brands most likely to be written off or subject to theft were BMWs and Fords, which made up 17% of total overall GAP claims. This was closely followed by Mercedes-Benz and Vauxhall in second place (11%) and Audis in third place (4%).

While BMW and Ford took the lead when it came to the highest percentages of overall claims for vehicles written off or stolen, the highest costing average claims were made by Mercedes-Benz drivers at £5,165 per person, closely followed by Audi drivers, whose claims averaged at £4,905.

Advances in immobiliser and keyless technologies resulted in a decline in vehicle crime throughout the 2000s. However, it seems criminals are now finding ways to counter the latest safety innovations and technology as vehicle-related theft has risen 30% since 2014.

Warranty Direct’s data has shown the average individual pay out for theft-related claims since 2014 resulted in £3,360 per customer.

Simon Ackers, Warranty Direct’s Chief Executive Officer commented on the results: “It’s clear from the recent steep rise in vehicle-related thefts and write-offs, advances in vehicle manufacturing and technology cannot always prevent irreparable damage. The motoring industry must continue to adapt and encourage consumers to guard against potential loss with GAP insurance and visual deterrents such as steering wheel locks and alarms, which could help protect vehicles from theft.”

Jan 022018
 

A checklist for when the unanticipated occurs

While there has been an 11 percent decrease in UK road accidents within the last five years, there were still 181,384 reported cases during 2016.

When it comes to car accidents many may think, ‘it will never happen to me’. Unfortunately, that might not be the case and things can happen outside even the most experienced of motorists’ control.

For help when you need it most, Warranty Direct has put together advice to make sure you’re prepared, whatever happens on the roads…

Be prepared

You never know when an accident might occur, so it’s important to be prepared. Have your insurance information, vehicle registration and license available at all times while on the road.

In case emergency situations occur in the dark or with bad visibility, it’s a good idea to have a torch, reflective triangle and high visibility jacket in your car to ensure other motorists can see you.

Safety First

Even if you think it’s not serious and you’ve only caused a couple of scuffs or scratches, you must stop after an accident. Failing to do so is a punishable offence by the Road Traffic Act.

If your car is driveable, find a safe place to pull over, switch off your engine and turn your hazard lights on to alert other road users.

If anyone has been hurt, contact an ambulance as soon as possible. Unless their injuries prevent it, remove passengers from the vehicle to a safe place. If the road is blocked, you should call the police.

You and your passengers should stand behind the motorway crash barrier, wearing reflective jackets, so you are visible to other drivers and wait for the emergency services to arrive.

According to the Highway Code, you must leave any animals in the vehicle or, in an emergency, keep them under control on the verge.

Collect all the necessary details

When you’re involved in a car accident you’re obligated to give your name and address to anyone else involved. You should also collect contact details from any drivers, passengers and witnesses.

Ask any drivers involved for their insurance details and establish whether they own the vehicle. If they don’t, find out who does and note their details.

If damage has been caused to third party property or a parked car you should leave a note with your contact details on a car’s windscreen if you’re unable to find the owner. If you don’t exchange details at the scene, you must report the incident to the police within 24 hours.

You’ll also need to make note of other details, which will help when it comes to sorting out the incident with insurers.

These include:

  • Time and date of the crash
  • Registration, colour, make and model of all vehicles involved
  • Photos for evidence – most mobiles will take good enough pictures to help you recall significant details.

Dealing with your insurer

It’s important to try to stay neutral and not accept liability or apologise if you’re unsure of who or what has caused the accident. Of course, this can be difficult in a stressful situation when emotions are heightened, but believe it or not, even saying something as small as ‘sorry’, could work against you later on when claiming for insurance.

While you are not obligated to claim after an accident, you should report the accident to your insurer within the time stated in your policy. Otherwise, your insurer has the right to refuse to cover you in future.

If you have GAP insurance, it’s worth noting some providers will ask you to call them before accepting any offer by your regular insurer. Make sure you inform the insurance provider of the accident to ensure the correct pay-out from the motor insurer.

Mar 072017
 

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.

Theft Prevention

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.

*** See http://www.ukcrimestats.com/National_Picture/

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.

Jan 092017
 

For many of us, our car is one of our most prized possessions and one of the most expensive purchases we’ll ever make.  Despite how careful we might be whilst driving and how well we look after our cars both on and off the road, anything could happen.  Being unlucky enough to have your car stolen and not recovered, or to be involved in an accident where your car is written off, is never beyond the realms of possibility.

In addition to the emotional strain these eventualities can put you under; there will inevitably be financial implications.  However comprehensive your insurance policy might be, if your vehicle is declared a “total loss” and you make a “total loss claim” to your insurer, most insurers will only pay out the current market value of your vehicle at the time of incident.  This could leave you with a shortfall of thousands of pounds in comparison to the purchase price of the car, meaning that if you want to replace it with a like-for-like you’ll have to make up the outstanding balance.

To guard against this potential cost in the event of a total loss claim, you can cover yourself with a GAP (Guaranteed Asset Protection) insurance policy, to cover the difference.

How GAP insurance works:

When buying a new car for, say, £20,000, a consumer takes out both a comprehensive motor insurance policy and a GAP insurance policy. Over the course of the first three years of ownership, which is when a new car depreciates the most, the market value of the car may fall to, say, £12,000.

If an accident then happens or the car is stolen but not recovered, a total loss claim would need to be made. When the claim is approved, the motor insurer would pay out the market value of the car (the £12,000) and GAP insurance covers the outstanding balance of £8,000, which covers the remaining amount of the car’s original purchase value.–

What cover is available:

There are commonly three types of GAP insurance available, and at Warranty Direct we pride ourselves on arranging flexible policies that can cater to new or used cars either purchased from a dealer or privately*. The three types of policies offered by Warranty Direct are:

  • Vehicle Replacement Insurance (VRI) – this covers the difference between what the motor insurer pays out and the cost of a brand new car of the same make, model and specification. This policy gives you cover even if the manufacturer’s prices have increased since buying the original car.
  • Return to Invoice Insurance (RTI) – this covers the difference between what the motor insurer pays out and the original invoice price paid for the car.
  • Return to Value Insurance (RTV) –this covers you  for the difference between what your motor insurer pays out and the value of the car at the time when the GAP policy was purchased (which doesn’t need to necessarily be when you bought the car)

 

Other factors to consider:

As with most insurance policies, there are some limitations to Warranty Direct’s GAP Cover Insurance which you should be aware of before taking out a policy. Below are the most significant ones:

  • If your motor insurer doesn’t pay out on your total loss claim then you will be unable to claim on your GAP insurance, as the two go hand-in-hand.
  • Your GAP cover will be invalidated if the vehicle is written off due to an accident where the driver is under the influence of alcohol or drugs.
  • Warranty Direct’s GAP Cover insurance isn’t available for electric cars, motorbikes, vehicles modified from the manufacturer’s specification or vehicles which are used for pacemaking, speed testing, other competitive events, or for hire or reward.
  • The incident leading to the total loss of the insured vehicle must occur within Great Britain, Northern Ireland, Isle of Man, Channel Islands or the European Union.

It is of course important to consider the pros and cons of any policy of insurance and make sure you read the full terms and conditions in order to understand exactly what the policy entails and see whether it is right for you. You can obtain a copy of Warranty Direct’s full GAP policy terms and conditions from our website. Carefully considering all the factors such as the ones above will give you the freedom to pick a policy you know is right for you and prevent ill-informed decisions, which could lead to costly consequences.

Why Warranty Direct:

We’ve been providing GAP insurance since 2011 and are one of the leaders in the industry. With the cost of our GAP cover starting from just £136 for three years**, we aim to provide competitive and affordable cover which will help you avoid being out of pocket in the unfortunate event that your car is written off or stolen and not recovered.

Find out more about our policies here, so you can plan how best to cover yourself from potential financial loss.

* Types of product available subject to car eligibility criteria. See www.gapcoverinsurance.co.uk for more information.

**Price is based on a 3 year Return To Invoice policy for a Ford Focus 1.6 TDCI with a £5,000 claim limit.

Warranty Direct’s 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. 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.

Oct 062016
 

When it comes to buying a car there are numerous factors to consider, and ultimately we all want to get good value for the money we put into a purchase. Value for money when buying a car doesn’t just involve the price you pay when you buy it though – more often than not we need to consider the value we’ll get from re-selling it in the future.

Depreciation is one of the biggest factors to be assessed when making this decision, but it can frequently be overlooked in favour of style and desirability at the time.

Most cars depreciate at a rate of around 20% per year over the first three years of ownership, but there are a number of things to take into consideration which could help you retain as much value as possible thereafter.

The Key Factors:

The general reliability of your car is crucial in reducing depreciation – certain manufacturers have a reputation for unreliability so a bit of brand research is a must. The less you have to spend after services and MOTs, the better it is at the time and in the long run. In terms of MOTs and services, it is key to maintain a full service history to illustrate reliability as well.

Fuel type and MPG can have a significant impact on depreciation. Typically, diesel cars are more economical but the gap is closing as petrol engine efficiency improves, so newer petrol models should maintain value well. Looking ahead, hybrid and alternative energy vehicles will be a good option as, due to increasing demand, value will be more solidified. In addition to economy, overall mileage has a huge effect on value as the higher the mileage, the lower the value.

By-and-large, the bigger the car the higher the running and maintenance costs will be, so the resale value for superminis and hatchbacks is usually very good. Buying a car with lower running costs, including fuel, will in turn lead to a lower road tax which is highly desirable in a second-hand car.

A car’s value also affects insurance – for a lower value car an owner could consider third party or third party fire and theft policies to reduce their premiums. Insurers also study information on estimated cost of repairs and potential repair time, so reliability and depreciation has a major bearing on the overall cost of insurance.

The original cost of the car is worth bearing in mind, as if you take into account 20% depreciation per year during the first three years, a car worth £60,000 will depreciate by £12,000 per year as opposed to a £20,000 car retaining far more of its value by losing £4,000 per year.

Minimising Depreciation / Maximising Value

  • Maintenance – taking good care of your car on and off the read is key. Damaged bodywork and interiors will decrease value, as will worn out engines that have been aggressively driven. Buying a Haynes manual for your car is a great way of helping to reduce running costs too.
  • Don’t buy brand new – buying a ‘nearly-new’ or a five-year-old car will help you avoid the stage where the most depreciation occurs. Buying an eight to ten-year-old car is also an option, as this won’t depreciate any more than it already has, but this needs to be weighed up against potentially higher repair costs.
  • Don’t modify, choose extras wisely – ‘boy racer’ modifications such as spoilers, noisy split exhausts and flared wheel arches tend not to be desirable in the second-hand car market. However, options such as sat-nav, leather seats and air con are highly desirable and will be valuable additions.
  • Consider GAP insurance – because your car starts losing value the moment you drive off the forecourt, a GAP insurance policy is worth investing in if you’re paying for the car on finance. So, if you’ve bought a relatively new car and anything unforeseen happens to it the GAP insurance will cover the value lost by depreciation.
  • Leasing – this can be a good option in terms of keeping the running costs and repairs down, as they are generally included in your fixed monthly payments. Particularly useful for those that will have high mileage, but keep an eye out for mileage limits in the contract as they can be very costly.

Depreciation is something we all have to tackle if we’re buying a car, but hopefully with these tips you can make the most out of what is for many people, not just a means of getting around, but a great way of having fun and extension of their personality.