Show me an example
Lets take a look at a common scenario....
| Mr Smith buys a vehicle for an agreed inclusive price | £15,000.00 |
| He pays a deposit of | £1,000.00 |
| And finances with the dealers finance company the balance of | £14,000.00 |
| Financing at 5% per annum over 5 years the interest is | £3,500.00 |
| On the day he drives away, Mr Smith owes the lender | £17,500.00 |
Sadly, after 24 months of happy motoring Mr Smiths car is stolen and written off by his insurer. |
|
| To settle his finance agreement on the car he no longer has, | |
| Mr Smith is required to pay his lender | £9,750.00 |
| But Mr Smiths insurer will only pay | £7,500.00 |
| Mr Smith therefore needs to pay his lender the difference of | £2,250.00 |
| If Mr Smith had purchased Finance Gap Insurance, the policy would have paid £2,250.00 to his lender on his behalf. |
