Avoiding an expensive car write-off

Fri, 08 Feb 2008



According to a car finance news report, new and used car buyers could be losing out on thousands of pounds if their car is written off. By not taking out two specific insurance policies, the report argues, car buyers are taking a risk.

The study was conducted by MB&G, the largest privately owned warranty provider in the UK. The company reportedly said that car buyers are missing out by not purchasing Return to Invoice Insurance (RTI) or Guaranteed Asset Protection (GAP) from their car dealer .

The company pointed to statistics that indicate over 500,000 cars are written off every year in the UK. When this happens many consumers are left owing money to the car finance company who they borrowed from. When it comes to expensive new or used cars, insurance payouts may leave a wide gap.

Kevin Pearce, the operation director of MB&G, reportedly commented: "We recently had a situation where a high value prestige car was written off following an accident. The shortfall between the insurance pay out and the outstanding finance was £12000 because the car was only weeks into its finance contract. Because the driver had taken out GAP insurance at his franchised dealer the policy paid out and was able to buy another car without being out of pocket."
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