Add negative equity cover to your Gap Insurance coverYou may have heard the term 'negative equity' being associated with many forms of financial agreement. For example you may be in negative equity on your house where you are in a position whereby the current value of the house is less than the outstanding mortgage on the property. It can also happen in the same way for a vehicle, where you may have an outstanding finance settlement that is higher than the current vehicle value. If this were to be the case when you decide you want to part exchange the vehicle then you may find that the difference between the part exchange value and the amount you still owe on finance (the negative equity) can be carried over on to your new vehicle's finance agreement.
Let us explain by way of an example.
You look to part exchange your old vehicle against a brand new one. Your new vehicle price is £20,000. The old vehicle is valued at £10,000, however you still have finance outstanding on the old vehicle of £12,000. This means that you have negative equity of £2,000. The motor dealer may arrange a new finance deal for the new vehicle at £22,000 (ie £2,000 above the purchase price), meaning your negative equity has been carried over to the new vehicle for you.
Most Gap Insurance products will NOT cover negative equity carried over in this way. However at GapInsurance123 we always look for a solution.
That is why we can offer an additional option to our policies, that for an additional premium paid you can cover up to £2,000 of negative equity carried over from your previous finance agreement. You will see the option on the quote page, and by simply clicking the 'Add negative equity' check box on the quote you can provide yourself with this extra cover should you require it.
If you need any further information on this please contact us by email or call us on 0800 195 4926.