Ok, some people may already know what im about to write, but I know there are some people on here, like myself, that are new to buying a car on some sort of finance, and probably aren't fully aware of the pitfalls. In particular, what happens if the worst occurs, and your car is written off?
Someone mentioned in another thread that you should tell your insurance company about your factory-fitted options, as otherwise you wont be fully covered for them in the event of a claim. I'm with Elephant, and quite frankly, they dont care about your options. Dont get me wrong, i've made a claim with them before, and they were excellent in handling it. However, they dont care about your 'extras'. They see a 1.2 Sport as being worth £9,500 regardless of whether you notify them of the options or not. Also, they do not offer a 'new for old' type of policy whereby your car is replaced with a brand new identical vehicle during the first year of its life.
So, as an example, I am picking up my 500 next week with the spec as in my sig, which came to a grand total of £10,750. If I was to have the huge misfortune of being involved in an accident immediately after driving off the forecourt, causing the car to be written-off, my insurance company would give me £9,500 maximum. Which although is enough to cover the finance, it wont get me another 500 in my spec.
I suppose my point is, check your insurance policy, especially if you've gone for one of these 'budget' policies to keep your premiums low. Just because you told them that your car is worth £XXXX, doesnt mean thats what they value it at.
If you find that your insurance company has the same views as Elephant, definitely invest in some GAP insurance. This will pay either the shortfall between the insurance payout and the remaining finance, or the shortfall between the insurance payout and the amount you originally paid for the car. Its a one-off payment to cover the entire loan term, not something that needs to be renewed annually.
Make sure you shop around though, and bear in mind that you usually have around 90 days from date of purchase to buy it. Loan and Finance companies should be able to offer it to you, but it will most likely be more expensive than getting it separately.
(Mods, please feel free to move this to a more general forum if necessary, but please keep it linked here as this has been talked about here recently and I think its important)
Someone mentioned in another thread that you should tell your insurance company about your factory-fitted options, as otherwise you wont be fully covered for them in the event of a claim. I'm with Elephant, and quite frankly, they dont care about your options. Dont get me wrong, i've made a claim with them before, and they were excellent in handling it. However, they dont care about your 'extras'. They see a 1.2 Sport as being worth £9,500 regardless of whether you notify them of the options or not. Also, they do not offer a 'new for old' type of policy whereby your car is replaced with a brand new identical vehicle during the first year of its life.
So, as an example, I am picking up my 500 next week with the spec as in my sig, which came to a grand total of £10,750. If I was to have the huge misfortune of being involved in an accident immediately after driving off the forecourt, causing the car to be written-off, my insurance company would give me £9,500 maximum. Which although is enough to cover the finance, it wont get me another 500 in my spec.
I suppose my point is, check your insurance policy, especially if you've gone for one of these 'budget' policies to keep your premiums low. Just because you told them that your car is worth £XXXX, doesnt mean thats what they value it at.
If you find that your insurance company has the same views as Elephant, definitely invest in some GAP insurance. This will pay either the shortfall between the insurance payout and the remaining finance, or the shortfall between the insurance payout and the amount you originally paid for the car. Its a one-off payment to cover the entire loan term, not something that needs to be renewed annually.
Make sure you shop around though, and bear in mind that you usually have around 90 days from date of purchase to buy it. Loan and Finance companies should be able to offer it to you, but it will most likely be more expensive than getting it separately.
(Mods, please feel free to move this to a more general forum if necessary, but please keep it linked here as this has been talked about here recently and I think its important)
