What Happens If My Van on Finance is Damaged?

December 12th, 2022

There are a great many benefits to having a van on finance – however there are a couple of extra steps you may need to take in case your van is damaged or written off.

What is GAP insurance and do I need it?

• GAP (Guaranteed Asset Protection) Insurance covers the shortfall that can occur following an insurance pay-out for a vehicle that has been written off, and the remaining amount of finance still owed for the vehicle.
• GAP Insurance will ensure you aren’t left to pay the remaining finance on a vehicle after it is no longer in your possession.
• Your van finance company will be the vehicle’s owner during your lease agreement. This means that if your vehicle is damaged or written off, it is worth less to them, and they have lost money on the deal. GAP Insurance is important as it means that you aren’t left to pay the difference.

Fair Wear and Tear or Damage

• Fair Wear and Tear guidelines as set out by the BVRLA cover any minor damage from reasonable daily use of your van on finance. This won’t affect your leasing agreement and you don’t need to report this to your van finance company.
• Damage from an incident or accident that falls outside of these guidelines will need to be reported to your funder.
• In finance agreements such as Contract Hire where the van is returned at the end of the agreement have excess damage charges in place. It’s important to be aware of these charges if your van is damaged during your leasing deal.

Steps to take if your van on finance is damaged:

• If you’ve been in an accident or incident always contact your insurance company first.
• You should then notify your finance company and tell them that your van on finance has been damaged or written off.
• Then consult your finance agreement, this should detail the process that will be followed.
• If you’ve taken out Gap Insurance then you will be covered for any shortfall between the insurance pay-out for a vehicle that’s been written off and the remaining finance owed.

Should you need any further information on GAP Insurance or what to do if your van on finance is damaged, please contact our van experts on 01179625314