Vehicle Replacement Insurance, or VRI Gap Insurance for as it is more commonly known, is the newest form of Gap Insurance available. VRI Gap Insurance is not one of the traditional gap insurance types offered by the dealers. The original types developed, finance gap, and RTI Gap Insurance are still the levels of Gap Insurance offered by your dealer.
So how does VRI Gap Insurance beat inflation?
As gap insurance has developed over the years, it has been recognised that return to invoice could protect your investment, but helping you back to the original price you pay.
However, the cost of new cars generally rise over time. Factors such as superceding models, manufacturers production costs and VAT rises can all effect the cost of new cars over a period. A new car in 2008, bought for £15,000, is likely to be much more to replace on a ‘like for like’ basis in 2011 for the same or equivalent model.
Also, when you buy a new vehicle, you may take advantage of a dealer/manufacturer offer, or but a ‘pre reg’ or demonstrator at a price far less than normal. Having to replace a ‘written off’ vehicle may mean you do not have the luxury of time to choose your deal, and a ‘bargain deal’ may not be available.
In that situation, a ‘return to invoice’ style cover could provide cover to the original invoice price. This may be thousands short of giving you the funds for an equivalent vehicle on a ‘like for like’ basis. This is where VRI Gap Insurance steps in., by providing enough cover to protect the depreciation AND the inflation effects of having to replace the vehicle. VRI Gap Insurance is the only Gap Insurance that can provide this double cover.
The devil is in the detail with VRI Gap Insurance
Be aware that there are limits on VRI Gap Insurance polices, certain age and mileage restrictions apply at the start of the policies.
There are also certain VRI Gap Insurance policies that simply provide your cover to the original invoice price, not the replacement cost. This is basically RTI cover, not VRI Gap Insurance.
As you can actually be returned to a value higher than you originally paid, VRI Gap Insurance can be looked at as the top level of gap insurance available, and therefore the premium price can reflect this.
Many dealers do not offer VRI Gap Insurance, so looking on the internet for the best VRI Gap Insurance deals is a must.
However, for the reasons outlined above, for purchasers of new and nearly new vehicles, it could represent the best overall choice of VRI Gap Insurance.