Why the price after discount?

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Class2ldn
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Why the price after discount?

Post by Class2ldn » Wed Apr 19, 2017 1:43 pm

Im confused with this as my partner wants cover on her policy
The purchase price was 17879 before discount but 13495 after?
Surely if you use the lower one its not going to provide enough cover for the original purchase price if theres no discounts available.
Ive always been with ala and they want the price before discount. For 12500 on yours it 139 but ala want 207 because they are covering a higher price.
Which do i use then?
Mineral Grey M140, Auto, Coral, Heated seats/wheel, Sun protection, Pro nav, HK, Comfort package, Lumbar, Front/Rear sensors, Speed limit display.

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Re: Why the price after discount?

Post by GapInsurance.co.uk » Wed Apr 19, 2017 2:02 pm

Class2ldn wrote:
Wed Apr 19, 2017 1:43 pm
Im confused with this as my partner wants cover on her policy
The purchase price was 17879 before discount but 13495 after?
Surely if you use the lower one its not going to provide enough cover for the original purchase price if theres no discounts available.
Ive always been with ala and they want the price before discount. For 12500 on yours it 139 but ala want 207 because they are covering a higher price.
Which do i use then?
It's always been the case that our policies have been rated in part based on the actual purchase price paid for the vehicle after discount. We use the same underwriter as they do so I'd have assumed they'd practice the same but there's a number of reasons why they may not. If, for example, their scheme isn't performing as well (e.g. They're receiving more claims than we are) basing policies on the list price, courtesy of the policies then being more expensive, is a way of ensuring more money is going *in* to the scheme in the first place. On the other hand, their claim ratio may not be the issue... if for example, they have a profit share arrangement in place with underwriter (where some of the funds left over after all claims have been paid are paid back to them) having more money go in to the scheme from the outset means in theory that they get a larger share at the back end. There are other reasons but one of these two (or a combination of the two) are the most likely.

Nevertheless, assuming you're wanting Replacement GAP insurance (given the discount you've received, this would be prudent) with us you still input the price you paid for the vehicle *after* discount and then it's just a case of ensuring you choose a Claim Limit that is sufficient enough to cover the discount you've received, future depreciation AND any future increase in the list price of a new equivalent.

Based on a list price today of £17,879, assuming average mileage and a three year duration, I'd recommend a £12,500 Claim Limit as you've chosen so far.

It'd be different if you were buying Invoice GAP insurance which is only ever going to get you back to the price you paid after discount anyway (regardless of who you buy it from).

If it makes you feel more comfortable, you can enter £17,879 as the purchase price with us and proceed to buy a policy on that basis, however the only effect of doing this would be that you'd be paying over the odds for the policy to satisfy your own doubts rather than correcting any failings in the policy.

I hope this helps but if you have any other questions, please ask.

David
Invoice, Replacement & Contract Hire GAP Insurance quotes at up to 85% less than your Motor Dealer
T: 01484 490095 E: support@gapinsurance.co.uk W: gapinsurance.co.uk F: facebook.com/gapinsurance

Class2ldn
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Re: Why the price after discount?

Post by Class2ldn » Wed Apr 19, 2017 2:07 pm

Yeah so if i put down 13495 but in 3 years it was written off . What happens? Say insurance payout 10k but the same car is now 20k ?If i had 12500 that would leave me with 2500 buffer?
I dont see how ala are then charging more for the gap if in reality that price makes no difference?
Her gfv is 7914 so say its 18k to replace brand new that would cover it?
Mineral Grey M140, Auto, Coral, Heated seats/wheel, Sun protection, Pro nav, HK, Comfort package, Lumbar, Front/Rear sensors, Speed limit display.

Class2ldn
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Re: Why the price after discount?

Post by Class2ldn » Wed Apr 19, 2017 2:31 pm

Ive just noticed that with all the extra otr costs etc the price is 17464 so even though before the discount is 13495 if you add on all the dealer charges and vat it 17464 so im assuming this would be the price i use?
Mineral Grey M140, Auto, Coral, Heated seats/wheel, Sun protection, Pro nav, HK, Comfort package, Lumbar, Front/Rear sensors, Speed limit display.

OneTwenty
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Re: Why the price after discount?

Post by OneTwenty » Wed Apr 19, 2017 2:52 pm

Unless specified I think gap insurance is just there to get you back to what you actually paid, rather than what the car costs later on down the line.

It would not be feasible to offer people that option unless they paid much higher premiums.

e.g. a new car is £20k to buy and is written off after 3 years but due to a poor economy inflation has shot up to 50% and the same car is now £40k, they can't be giving you an extra £20k over your original purchase.

You get back what you paid, hence after discounts.
66 M240i Coupe, MW, Coral, Auto, Vis/Comfort/Sun, Pro Nav, Heated Wheel/Seats, Elec Seats/Lumbar, Adaptive, Camera/Park Assist, Speed Lim, HK, Split/Fold, WiFi/EBT, F/M

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Re: Why the price after discount?

Post by GapInsurance.co.uk » Wed Apr 19, 2017 3:08 pm

Class2ldn wrote:
Wed Apr 19, 2017 2:07 pm
Yeah so if i put down 13495 but in 3 years it was written off . What happens? Say insurance payout 10k but the same car is now 20k ?If i had 12500 that would leave me with 2500 buffer?
I dont see how ala are then charging more for the gap if in reality that price makes no difference?
Her gfv is 7914 so say its 18k to replace brand new that would cover it?
Class2ldn wrote:
Wed Apr 19, 2017 2:31 pm
Ive just noticed that with all the extra otr costs etc the price is 17464 so even though before the discount is 13495 if you add on all the dealer charges and vat it 17464 so im assuming this would be the price i use?
For clarity, if your Motor Insurer pays out £10k and the cost to replace new had by then increased to £20k a Replacement GAP insurance policy with a £12,500 claim limit would pay the £10k gap between the £10k MI payout and the £20k replacement price. The claim limit refers to the maximum amount that the policy will pay, in addition to your MI payout, towards the cost of replacing the vehicle with a new equivalent at the time of claim. E.g. It's not that it will always pay out £12.5k regardless.

In terms of charging more, or not... our policies are rated based on the following:

1. The policy type
2. The policy duration
3. The Invoice price paid after discount
4. The policy Claim Limit

In terms of the price paid, basically there are price bands and in this thread so far we're discussing whether the price paid was higher or lower than £15,000. If lower, it's one price whilst if higher, it's another (usually higher) price.

In terms of the price/figure you need to use, we need to know the all-inclusive price that you paid to put the vehicle on the road. Literally include everything (vat, RFL, delivery, registration etc) including the deduction of any discount given. This figure is normally reflected on the Invoice as the "Net Invoice Price" or "Cash Price of Goods" or similar.

If, as you say, ALA (or any other entity) are asking you for the full list price prior to discount, to calculate this proper you'd need to work through each line of your Invoice leave the discount IN (don't deduct it) and then work through adding on VAT and all other costs to arrive at the full figure.

If it helps, I'm happy for you to email me (support@gapinsurance.co.uk FAO David) a copy of your invoice for me to look at and I'll confirm the figure you need to use in either case.

David
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Re: Why the price after discount?

Post by GapInsurance.co.uk » Wed Apr 19, 2017 3:12 pm

OneTwenty wrote:
Wed Apr 19, 2017 2:52 pm
Unless specified I think gap insurance is just there to get you back to what you actually paid, rather than what the car costs later on down the line.

It would not be feasible to offer people that option unless they paid much higher premiums.

e.g. a new car is £20k to buy and is written off after 3 years but due to a poor economy inflation has shot up to 50% and the same car is now £40k, they can't be giving you an extra £20k over your original purchase.

You get back what you paid, hence after discounts.
You're referring to "Invoice GAP insurance" which is all about getting you back to the original price you paid.

Replacement GAP insurance however, is all about getting you up to the cost of replacing it with a new equivalent (assuming you originally bought new) at the time of claim.

E.g. In your example so long as you had a policy with a sufficient Claim Limit that is exactly what the policy would do.

Regards

David
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T: 01484 490095 E: support@gapinsurance.co.uk W: gapinsurance.co.uk F: facebook.com/gapinsurance

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Re: Why the price after discount?

Post by OneTwenty » Wed Apr 19, 2017 3:26 pm

Good to know, yes I was referring to the invoice gap.
66 M240i Coupe, MW, Coral, Auto, Vis/Comfort/Sun, Pro Nav, Heated Wheel/Seats, Elec Seats/Lumbar, Adaptive, Camera/Park Assist, Speed Lim, HK, Split/Fold, WiFi/EBT, F/M

09 320d E91, Silver, Pro Nav, BT, Auto L/W, Ht/Leather, SPG, Cruise

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Re: Why the price after discount?

Post by GapInsurance.co.uk » Tue May 02, 2017 5:56 pm

Class2ldn wrote:
Wed Apr 19, 2017 2:31 pm
Ive just noticed that with all the extra otr costs etc the price is 17464 so even though before the discount is 13495 if you add on all the dealer charges and vat it 17464 so im assuming this would be the price i use?
Did you get this sorted? Do you need any further help?

Best wishes

David
Invoice, Replacement & Contract Hire GAP Insurance quotes at up to 85% less than your Motor Dealer
T: 01484 490095 E: support@gapinsurance.co.uk W: gapinsurance.co.uk F: facebook.com/gapinsurance

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