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Car Features

The UK Automotive Industry and the Value of GAP Insurance

8 Dec , 2017  

The UK automotive industry is currently going through a pivotal time with the uncertainty over Brexit, the economic climate and the Government’s clean air plans causing a great deal of uncertainty and lack of confidence.

This will clearly have a long-lasting impact on the industry and we are currently seeing this with the lack of new car sales.

 

Statistics

It has recently been announced that new car sales have fallen for the 8th consecutive month, with a huge 11% slump in November compared to last year.

Diesel has taken the brunt of the slump, having fallen a staggering 30%. It is clear that consumers are currently unwilling to make large financial decisions and the 2040 petrol and diesel ban is weighing over people’s heads – this is also evident with Alternatively Fuelled Vehicle sales rising by 33% in November.

 

The Importance of GAP Insurance

For those that are investing in new vehicles, it is important that they are aware of the fact that GAP insurance is a product that is not sold with the automobile.

Dealerships should be making this clear, as currently, new car buyers will not be covered and could become seriously out of pocket. Due to the ecumenic climate, the majority of new buyers are using credit to obtain the vehicle and this can be dangerous if the car is involved in an accident or stolen.

 

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Shortfall Covered

GAP insurance is important because an automobile begins to depreciate in value as soon as it leaves the forecourt and can be as much as 77% over 3 years.

If the automobile were to be involved in an accident or is stolen and not recovered, the insurer only covers the current market value of the automobile – this could leave significant shortfall between the payout and the amount outstanding on the finance agreement. GAP insurance covers this shortfall and makes sure that your investment is protected.

Many motorists are unaware of the shortfall that they could face, which is why the UK automotive industry needs to make new buyers aware of the importance of GAP insurance. For the best levels of cover, motorists should use leading specialists like ALA for protection.

The auto industry is going through a difficult time with a lack of consumer confidence impacting sales. With the drop in sales, it is important that this type of insurance is pushed as it means that the majority will be seriously out of pocket if their new car is in an accident or stolen.

 

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By
Michael Fennel works as a journalist for a publishing company and loves technology and cars. He has been writing about everything gear related for five years and would like to become a racing driver.