Dec 172018
 

Leased or Financed New Car?If you’re considering buying a new car, you’ll have to decide whether you want to lease or finance the car. (Of course, it’s also an option to pay in full upfront, but most of us aren’t in a position to!) There’s a lot to consider when deciding between leasing and financing, including the cost of monthly payments, your driving habits (how many miles you expect to drive annually) and how long you anticipate you’ll have the car. But what about insurance costs?

Yes, the way in which you choose to pay for your new car could affect the insurance you pay every year.

The Difference Between a Leased and Financed Car

First things first, let’s identify the main difference between leasing and financing: ownership.

When you lease a car, you’re essentially renting the car for an extended period of time. Each month, you pay to continue renting it and, at the end of your lease period, you return the car to the dealer.

When you finance a car, you make monthly payments to a lender and, after your finance period ends and you’ve paid off the cost of the car and any interest incurred, you own the car free and clear.

Of course, since the terms of the agreements for leasing and financing are considerably different, the cost of each is also different. Leasing tends to be less expensive as your monthly payments essentially only cover the depreciation of the car. That way, when you return the car to the dealer, they haven’t lost any money. This explains why leases often have mileage restrictions; more wear and tear accelerates depreciation.

When financing a car, your monthly payments cover the cost of depreciation and your equity in the car so that after, say, 36 months, the car is yours.

Is it More Expensive to Insure a Leased or Financed Car

Whether you chose to finance your car or take out a lease, a third party has an interest in protecting the vehicle. When financing, that third party is whatever financial institution gave you the loan that you’re paying off each month. When leasing, that third party is the leasing agent or car dealer to whom you’re making a payment to every month.

While, yes, in both cases a third party has an interest in protecting the car, the leasing agent has more to lose if the car is damaged. As such, it’s required that leased cars have fully comprehensive coverage, which could cost more than the third-party insurance that all drivers in the UK are legally required to have.

It’s also important to realise that, when providing details about your vehicle to the insurance company, the registered owner isn’t you, but your finance company.

So, does all of this mean that leased cars are more expensive to insure than financed cars? Not necessarily! There are a handful of factors that can affect your insurance quote including the driver’s age, driving record, convictions, the make, model and year of the vehicle, the value of the vehicle and even where you park your car. 

Top Tips for Reducing Insurance Costs

If you’re looking to reduce your insurance costs, switching from a leased car to a financed car shouldn’t be your first step.

Instead, look for a car with a smaller engine that’s worth less money, keep your car garaged, consider having a black box fitted and agree to a mileage cap.

Nov 122018
 

Extended Car WarrantyShould I buy an extended warranty? If you’ve ever bought a used car or kept a new car for over three years until the standard, manufacturer warranty expired, you’ve almost certainly asked yourself this question. If you’re struggling to find the answer, this guide should help!

What Exactly Is an Extended Warranty?

All new cars come with a manufacturer warranty, which typically lasts for three years. This warranty, minus a few exceptions, will cover anything that goes wrong with the car within that timescale.

An extended warranty from a warranty provider such as Warranty Direct, is designed to be an easy way for you to extend this coverage after the manufacturer warranty expires, giving you protection in the event of unexpected vehicle failure.

Why Not Just Get The Parts Repaired or Replaced Myself?

The cost of parts and labour can be expensive and repairs are inevitable when you own a car. Things happen! Engines, fuel pumps, radiators, and other essential car parts have an average lifespan and, without an extended warranty or a manufacturer warranty, the burden of payment will fall entirely on you!

With an extended warranty, you pay a fee up front for peace of mind that, in the case of engine failure, for example, you’ll be covered.

What’s Covered With An Extended Warranty?

At Warranty Direct, we offer a core coverage as standard with the option to add on additional cover . With the core coverage, your engine, gearboxes, transmissions, ECUs & computers, casings, supercharger, turbocharger, and flywheels & drive plates are all protected minus a few exceptions. You’ll also have a choice of labour rates, parts contribution and excess.

Can I Take Out a Policy on a Used Car?

Of course! Provided your car is not older than 12 years old, and has travelled under 120,000 miles, then it could be eligible for an extended warranty. Get a quote for your used car here.

If I Get an Extended Warranty, Do I Still Need Car Insurance?

Yes. Extended warranties cover repairs that aren’t related to collisions, accidents, or other damage from outside sources. Instead, they cover the repair or replacement of parts due to wear and tear or a factory defect.

Car insurance is required by law and also protects other drivers on the road in case you cause an accident.

Avoid expensive repairs and drive with confidence that you’re covered by taking out an extended warranty today. More questions? Get in touch!

 

Warranty Cover is arranged and administered by BNP Paribas Cardif Limited, trading as Warranty Direct. Warranty policies are underwritten by Pinnacle Insurance plc. BNP Paribas Cardif Limited is a company, registered in England and Wales No.3233010 at Pinnacle House, A1 Barnet Way, Borehamwood, Herts, WD6 2XX and is authorised and regulated by the Financial Conduct Authority, Register No.309075

 

 

Oct 012018
 

New car checklistFor many young people, owning a car is a rite of passage. But, with so much choice available and with many young people on a tight budget, selecting the right student car can be tricky.

Warranty Direct has put together some helpful tips to help student motorists make the right decision, from buying your first car to beyond.

Where to start

When looking at potential vehicles, you can be tempted to go to the first car that catches your eye. However, it’s important to keep your budget in mind when choosing what’s right for you.

Firstly, you need to decide whether to buy a new or used car. Although initially more expensive, newer cars are normally more advanced in terms of safety, technology and fuel efficiency. This could save you money in the long-term.

On the other hand, a new car can lose around 40% of its value in the first year, so you may be left out of pocket when you go to sell it later.

Statistics also show around one-quarter of young drivers are involved in a crash within two years of passing their test. So with this in mind, it might be more cost-effective not to purchase a brand-spanking new vehicle until you have a little more experience on the roads.

Don’t get caught out with insurance

For the majority of students, expensive car insurance is far from ideal. Drivers aged between 17-24 can expect to pay over £1100 for their insurance policy.

Limited driving experience and a greater likelihood of being in an accident account for this high rate. However, there are ways for students to keep their insurance costs down.

For example, adding a more experienced named driver on a student’s insurance policy can shave an impressive 13% off their insurance premiums.

Younger drivers can make further financial savings by opting for a black box insurance policy. This is where the insurer fits a telematic tracker – which records speed, braking and cornering behaviour – to your vehicle.

 In fact, according to recent figures, 60% of the cheapest black box deals are for under-25s, compared with 50% two years ago.

Factor in reliability

It’s important students know what they need from a vehicle, not just what they want. Factors such as safety, cost and reliability need to be considered; particularly if you’re facing a lengthy commute from home to your new student accommodation.

Look out for vehicles with low repair and maintenance costs and features such as light steering and user-friendly controls.

Using tools such as our Reliability Index to see which vehicles are the most reliable could help you avoid expensive maintenance issues further down the line.

If you’re willing to look beyond flashy alternatives, the trusty Ford Fiesta is a good bet for students on a tight budget. The Fiesta scores highly in the reliability stakes and suits the needs of most young motorists.

Fuel for thought

For cash-strapped young drivers, one of the major drawbacks of owning a car is the cost of keeping a vehicle on the road.

With fuel costs rising, it’s worth looking out for the most fuel-efficient models on the market.

It’s also important to account for vehicle tax, MOT tests and the general cost of upkeep for your new vehicle. On average, it costs around £472 to maintain a used car over the course of a year.

It might be worth considering Just Add Fuel options which combine finance, breakdown, servicing and tax costs into a single monthly installment if your heart’s set on a brand new vehicle.

Owning a car can give you your first taste of ‘grown-up’ responsibility, so it’s important to think wisely if you want to experience the joy of the open road on a student budget.

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.

Jul 052016
 

Many motorists are taking up the opportunity to get GAP insurance upon the purchase of a new vehicle; even if it’s a used car. GAP Insurance is a product just as popular and sometimes more desired than a car warranty.  So why should car owners consider this insurance cover?

Nearly half a million cars are written off each year through accidents and around 150,000 cars are stolen*.  For those unfortunate enough to experience this situation, they may find themselves in a tricky situation, finding cash, to replace their lost motor. Motor insurers will commonly not pay out the full original value of the motor and instead only pay out a settlement equal to the value of the car at the time of the accident.

So if a brand new car costing £20,000 depreciates in three years to £10,000 and is then written off due to accident or theft, the motor insurer will only pay out the £10,000. The trouble now is finding the additional £10,000 to purchase a for-like motor and this is where GAP insurance plays its key role.

GAP insurance adds that extra protection to the depreciation of a motorist’s vehicle. As the name indicates, it will cover that missing gap of money to meet the actual value of the car at the time of purchase. So with GAP insurance taken out against the vehicle, that additional £10,000 doesn’t become so hard to find.  That is GAP insurance in its simplest form**.

The appealing factor of GAP insurance is that it available for brand new or used cars brought through dealers and used cars purchased privately in a variety of options.

Return to Value: This GAP insurance option pay the difference between what the motor insurer pays and the value of the car when GAP insurance is taken out.

Return to Invoice:  This GAP insurance option covers the different between what the motor insurer pays and the original invoice price paid for the car.

Vehicle Replacement: Designed for new cars, this option pays the difference between what the road insurer pays and the cost of a brand new car of the same make, model and specification. Even if manufacturer’s prices have increased since your original car was purchased.

Ultimately, having a car written off can be a distressing experience for anyone without having to think about how to replace it. GAP insurance can help bring that extra element of security so if the worse possible scenario with your car happens – getting back on the road will be easier.

Warranty Direct’s GAP Cover Insurance options have been designed to be flexible to motorists’ requirements whether you have a brand new or used car brought from a dealer or privately. With wide claims limit range and a dedicated team, Warranty Direct’s GAP Cover Insurance is designed to protect motorists from the pitfalls of a “total loss.” Call today on 0800 097 8838 or visit gapcoverinsurance.co.uk .

* – Based on stats provided by Honest John and LV=Car Insurance Report 2014

**- Terms and conditions apply.

Warranty Direct is an Insurance Intermediary authorised and regulated by the Financial Conduct Authority. Our FCA Register Number is 309075. Warranty Direct Limited is a company, registered in England and Wales No. 3233010 at Pinnacle House, A1 Barnet Way, Borehamwood, Herts, WD6 2XX. Policies are subject to English Law.