Is VRI Gap Insurance suitable for lease cars?

You may be wondering exactly what types of situations VRI Gap Insurance may be relevant or suitable. In particular, does VRI Gap Insurance apply to vehicles that are leased?

The answer to that question is ‘yes and no’, as the truth of the matter is it really depends on what type of lease you have in place. The main question regarding the lease is the:

Do you have the option to own the vehicle at the end of the lease?

VRI Gap Insurance and lease agreements

If the answer is that you do have the option to own the vehicle, then you can benefit from a VRI Gap Insurance policy.

Types of ‘lease’ that would allow you to own the vehicle at the end would be lease purchase or personal contract purchase (PCP).

In these cases, the ability of your vehicle replacement insurance cover to protect you back to the cost of replacement vehicle in the future can be an attractive option for the vehicle owner.

vri gap insurance

VRI Gap Insurance on lease agreements

However, if the ‘lease’ is a contract hire agreement, then the user is simply renting the vehicle from a leasing company. As the user would have no option to buy the vehicle, then they could not benefit from a vehicle replacement insurance policy.

However, in this case the user can still protect themselves against a financial shortfall with a specific Contract Hire Gap Insurance policy.

VRI Gap Insurance for your lease vehicle

With strong offers from manufacturers and motor dealers on PCP style lease agreements, the role of VRI Gap Insurance is quite clear. The PCP style finance often comes with a heavily discounted price, and often subsidised finance. If you had to replace a vehicle on this sort of lease, then VRI Gap insurance may be far better than a simple Return to Invoice style cover.

So there you have it, our opinion on VRI Gap Insurance and lease agreements.


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