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Whilst electric cars (EVs) are becoming a more popular choice for individuals looking to replace traditional diesel or petrol vehicles, it’s still early days for understanding how electric vehicles hold their value long term, and also how it works when it comes to claiming on insurance. 

If you’re an early adopter navigating unfamiliar territory with the EV market, it’s worth investigating GAP (guaranteed asset protection) insurance to help ensure you don’t end up out of pocket further down the line. 

It’s a well-known fact that depreciation kicks in on new cars as soon as you drive them off the garage forecourt. With EVs, the depreciation can happen even faster than gas-powered vehicles, due to how fast tech advances and shifting market values. 

EVs also tend to have higher up-front costs due to advanced technology and battery systems. The increased prices mean that many buyers finance over longer terms, or opt for minimal down-payments, which may result in a purchaser being ‘upside-down’ on a loan – effectively owing more on finance that the car’s current market value. 

Should your EV be written-off or stolen shortly after purchase, your standard car insurance may only cover the current market value of the vehicle, not what you still owe on your loan or lease – which could amount to a substantial difference considering the tech evolution factors. 

And that’s where GAP insurance is useful, as it covers the difference between what your insurer pays and what you still owe on your financing - preventing you from being stuck paying for a car you no longer have.

Gap insurance is a small price to pay for peace of mind, plus it helps protect your investment. If you’re purchasing or leasing an electric vehicle, give Prizm Solutions a call about adding gap insurance to your coverage. 

We can help with other motor insurances too, including Commercial Vehicle Insurance and Motor Fleet Insurance.