Buying a car is a significant purchase, so it can make sense to protect your asset against depreciation by taking out tailored gap insurance on top of your standard car insurance cover. Gap insurance works by insuring the deficit between any payout from your main car insurer, and a pre-agreed value placed on your car so can be an option worth considering.

What does Vehicle Replacement Insurance cover?

Vehicle Replacement Insurance (VRI) sets the value figure as the cost of an exact replacement for your car - both make and model. If you take out a VRI policy on a used car, a provider will also assess its condition, age and sometimes fittings.

When it comes to gap insurance vehicle replacement cover is the most comprehensive policy available. This is because you are covered even if the cost of an identical replacement exceeds what you originally paid.

How can you find the best VRI cover?

All policies are different and the cover you'll get and price you'll pay will depend on the provider, so you need to carefully compare what's on offer to find the best deal. Prioritise the level of cover you need for your car before you compare quotes so that you can find the best vehicle replacement gap insurance cover from the cheapest gap insurance providers.

Maximum claim limits are used by most VRI providers, although some do offer unlimited claims. Ensure that each provider's band of cover fits in with your car's value, so you're eligible to claim and won't lose out if your car is an insurance write off or stolen.

The length of policy is another aspect you'll need to consider, particularly against your car's record for depreciation. Research how well your make and model tends to hold its value, as this will dictate whether a deferred policy will be useful.

Check the policy features

Some providers protect dealer fitted accessories, up to a certain amount (e.g. 1,000). For example, if you had a roof rack fitted by a qualified dealer when you bought your car, its cost is included in the price of a direct vehicle replacement should you need to claim.

You should also check if there is a maximum claim limit attached to a policy, and if your car fits in with these limits. Lower level policies typically set their maximum payout in the region of 5,000, so if your car is worth close to this amount make sure you search for policies that match. The maximum claim is generally around 25,000, although some providers offer unlimited claims.

Some providers also offer different levels of protection for financial products bought with your car - such as a non-transferrable warranty, the excess you are liable for under your main insurance policy, and even your main insurer's premiums themselves. Make sure the cover level you choose is suitable for you.

Most Vehicle Replacement Insurance protects all named drivers listed on your car insurance policy. However, this is not always the case so if more than one person drives your car this is something you'll need to check. Equally, not all VRI protects both new and used cars, so it pays to sort providers by these criteria early on.

Finally, you should check whether you need your policy to be transferrable. If you upgrade your vehicle on a regular basis, a transferrable policy will save you taking out a new policy each time.

Example of vehicle replacement cover

You buy a car for 18,000, and take out a VRI policy. After 2 years, your car is written off or stolen and you receive just 10,000 from your main car insurance policy (its market value at the time of the insurance write-off). Under your VRI policy, you would be able to claim:

  • 8,000 if an identical replacement still costs 18,000*

  • 8,000+ if it had gone up in price or been replaced by a more expensive model

  • Plus extras such as the excess for lodging the claim with your main insurer, and accessories up to a set amount (depending on the provider)

*Check with each provider for their policy on replacement vehicles falling in value.

How to get the best Vehicle Replacement Insurance quotes

If you prioritise the cover you need from a Replacement Vehicle Gap Insurance policy, you can use our gap insurance comparison to list the best gap insurance providers side by side, and compare quotes to find cheap vehicle replacement cover.

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We include vehicle replacement insurance policies available from our panel of insurers and brokers. They are all regulated by the Financial Conduct Authority (FCA). Here is more information about how our website works.


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