Vri Gap Insurance: Protection For Your Car Loan

Vehicle Replacement Insurance (VRI) is the highest level of cover available from most insurance companies. It is a type of car insurance that tops up the market value settlement a car insurer would pay out if your car were written off or stolen. It is designed to cover the gap between the insurer's payout and the cost of the equivalent replacement car. This means that if your car is declared a total loss, VRI insurance will cover the cost of a brand-new replacement vehicle of the same make, model, and specifications as your original car, even if the price of the new vehicle has increased since you bought your car.

VRI gap insurance covers the cost of a brand-new replacement vehicle of the same make, model, and specifications as your original car

VRI Gap Insurance is the highest level of cover available from most insurance companies. It gives you added protection if your car is declared a total loss by covering the cost of a brand-new replacement. In other words, it pays the difference between the settlement you receive from the motor insurer and the cost of a replacement new vehicle, even if the retail price has increased.

For example, let's say you bought a car for £30,000, and after a few years, its market value depreciated to £20,000. This is what your motor insurer pays out. If the price of a new, equivalent car has increased to £35,000 due to factors like inflation, market fluctuations, or increased demand for new cars, VRI Gap Insurance would cover the £15,000 difference, allowing you to purchase a new, equivalent vehicle without additional out-of-pocket expenses.

In this way, VRI Gap Insurance covers the cost of a brand-new replacement vehicle of the same make, model, and specifications as your original car. This is particularly useful as the cost of new cars can rise due to inflation or changes in specifications.

VRI Gap Insurance is beneficial if you want the reassurance of being able to replace your car with the equivalent standard of the vehicle you first bought if it's written off or stolen. It's also useful if you bought your car with a significant discount, as it covers the cost of replacing the vehicle at its current replacement cost when you claim, not the discounted price you paid.

For instance, suppose you bought a new car for £20,000, which included a £2,000 discount off the list price. Three years later, the car is written off, and your car insurer pays out its current market value of £12,000. However, the cost of a brand new replacement car is now £22,500 due to inflation and fewer discounts being available. Your VRI Gap cover would cover the 'GAP' of £10,500, ensuring you can replace your car with a brand new one.

VRI Gap Insurance is typically bought for new vehicles purchased through registered dealerships. However, there are insurers who will cover second-hand vehicles and those bought privately.

It covers the gap between your motor insurer's settlement and the cost of a replacement vehicle

Vehicle Replacement Gap Insurance (VRI) is the highest level of cover available from most insurance companies. It gives you added protection if your car is declared a total loss by covering the cost of a brand new replacement.

VRI insurance covers the difference between the settlement you receive from the motor insurer and the cost of a replacement new vehicle, even if the retail price has increased. This is particularly useful as the cost of new cars can rise due to inflation or changes in specifications.

For example, suppose you bought a new car for £20,000, which included a £2,000 discount off the list price. Three years later, the car is written off, and your car insurer pays out its current market value of £12,000. However, the cost of a brand new replacement car is now £22,500 due to inflation and fewer discounts being available. Your VRI Gap cover would cover the 'GAP' of £10,500, ensuring you can replace your car with a brand new one.

VRI Gap Insurance is valuable if you want the reassurance of being able to replace your car with the equivalent standard of vehicle you first bought if it's written off or stolen. It's also useful if you bought your car with a significant discount, as it covers the cost of replacing the vehicle at its current replacement cost when you claim, not the discounted price you paid.

VRI Gap Insurance is a financial safety net designed to cover you if your car is a total loss and the payout from your motor insurer isn't enough to cover the cost of a replacement vehicle.

VRI gap insurance is ideal for car owners who got a great deal when buying their car

Vehicle Replacement Insurance (VRI) is a type of Guaranteed Asset Protection (GAP) insurance. It is ideal for car owners who got a great deal when buying their car, meaning they would be less likely to replace the vehicle like-for-like for what they originally paid.

VRI insurance covers the difference between the payout from your car insurer and the cost of a replacement vehicle of the same age, mileage, and specification, or your outstanding finance agreement, whichever is greater. This is particularly useful if your car is stolen or damaged beyond repair and is declared a 'total loss' by your motor insurer.

For example, let's say you buy a brand new car from a dealership for £35,000. Eighteen months later, your car is stolen and never recovered. Due to high mileage, your motor insurer offers a settlement of £28,000, which is £7,000 less than the original invoice price. However, the make and model of your vehicle haven't lost much value, and it will cost £32,000 to replace it with a like-for-like vehicle, only £3,000 less than the original price.

In this scenario, you are left with a financial shortfall of £4,000, making it difficult to buy a replacement car of a similar spec. Additionally, you may need to continue paying off the loan for the original vehicle. This is where VRI insurance comes in. It covers the £4,000 difference between your motor insurer's payout and the cost of replacing your vehicle, ensuring you can purchase a new car without incurring additional expenses.

VRI insurance is also beneficial if you bought your car with a significant discount. It covers the cost of replacing the vehicle at its current replacement cost, not the discounted price you initially paid. For instance, suppose you bought a new car for £20,000, which included a £2,000 discount. Three years later, the car is written off, and your car insurer pays out its current market value of £12,000. However, due to inflation and fewer available discounts, the cost of a brand new replacement car is now £22,500. VRI insurance would cover the £10,500 gap, allowing you to replace your car without any extra costs.

VRI insurance provides added protection and peace of mind, ensuring you can replace your vehicle with the equivalent standard you initially purchased if it is written off or stolen. It covers your vehicle's depreciation and protects against inflation, ensuring you don't suffer a financial loss due to value depreciation.

It is the highest level of cover available from most insurance companies

Vehicle Replacement Insurance (VRI) is the highest level of cover available from most insurance companies. It is a type of Guaranteed Asset Protection (GAP) insurance, which acts as a financial safety net if your car is written off or stolen. It is designed to cover the gap between the market value settlement paid out by your car insurer and the cost of a brand-new replacement vehicle.

VRI insurance is particularly useful if you got a great deal on your car, as it ensures you can replace it with an equivalent standard vehicle without losing out. It covers the cost of a new vehicle of the same make, model, age, mileage and specification, even if the retail price has increased due to inflation or changes in specifications. This means you won't be out of pocket if your car is written off or stolen, as you can replace it without incurring additional expenses.

VRI insurance is available for both new and used cars, although some providers only offer it for new vehicles. It is typically bought at the time of purchasing your vehicle, but some companies will still offer it if you already own the car. The cover usually lasts up to four years and is available to individuals and businesses.

It's important to note that VRI insurance doesn't just cover the cost of replacing your vehicle; it also provides added benefits, such as contributing towards your motor insurance excess and covering manufacturer-fitted extras.

When considering VRI insurance, it's essential to compare policies from different providers, as the level of cover can vary. The best VRI insurance products offer a cash settlement, giving you the flexibility to choose your replacement vehicle. They also include Return to Invoice (RTI) cover, ensuring you get the highest settlement amount.

In summary, VRI insurance provides valuable protection and peace of mind for car owners, especially those who want to ensure they can replace their vehicle without financial burden in the event of a total loss or theft.

VRI gap insurance is typically bought for new vehicles purchased through registered dealerships

Vehicle Replacement Insurance (VRI) is a type of Guaranteed Asset Protection (GAP) insurance that covers the difference between the market value of a car paid out by a car insurance company and the cost of a replacement vehicle of the same age, mileage, and specification. It is typically bought for new vehicles purchased through registered dealerships.

VRI insurance is ideal for car owners who got a great deal on their car, meaning they would be less likely to replace the vehicle like-for-like for what they originally paid. It covers the gap between the insurer's payout and the cost of a replacement vehicle, ensuring that car owners are not left out of pocket.

For example, if you buy a new car from a dealership for £35,000 and 18 months later, your car is stolen and never recovered, your motor insurer may offer you a settlement of only £28,000 due to high mileage. However, the make and model of your vehicle may not have lost a significant amount of value and will cost £32,000 to replace on a like-for-like basis. This leaves you with a financial shortfall of £4,000, and you may not be able to buy a replacement car with similar specifications.

In this case, a VRI policy will pay the difference between what your motor insurer pays (£28,000) and what it costs to replace it with a new vehicle of the same specifications (£32,000), which is £4,000 in this instance.

VRI insurance is typically available for vehicles up to 12 months old, with mileage less than 10,000 miles from the date of registration, and purchased within the last 90 days. It provides up to four years of GAP cover, pays up to £250 towards your motor insurance excess, and covers vehicles up to £150,000 in value.

VRI insurance is beneficial if you want the reassurance of being able to replace your car with an equivalent standard vehicle if it is written off or stolen. It is also useful if you bought your car with a significant discount, as it covers the cost of replacing the vehicle at its current replacement cost, not the discounted price you paid.

Frequently asked questions