A new vehicle loses a substantial share of its value immediately. If it is totaled in the first year or two, a standard policy pays what it is worth then, not what you paid.
New car replacement pays for a comparable new vehicle rather than the depreciated value. It has strict age limits.
Three things about insuring a vehicle in its first years.
A vehicle totaled a few months after purchase settles at actual cash value, which reflects that it is now a used car. The gap between that figure and the purchase price is real money, and it is largest in exactly the period when owners least expect a loss to cost them anything.
Gap cover pays the difference between the settlement and the loan balance, protecting the lender position. New car replacement pays for a comparable new vehicle, protecting you. A household can hold one and need the other, and the two are frequently confused.
These endorsements usually apply only within a stated age and mileage, often the first year or two. Adding one later is generally not possible, so it is a decision made at purchase rather than at renewal.
Cover that only exists early.
The endorsement is available only within a narrow window.
They solve different problems and both can apply.
It still applies, and on a new vehicle it is worth choosing deliberately.
Tell us the age and mileage of each vehicle and whether any is financed.
We raise new car replacement while the window is still open.
Request a quote