If you’ve recently purchased a new Peugeot you could be driving around in a financial time-bomb.
A bold statement you might think? Most definitely, although not unfounded, as Peugeot’s tend to depreciate just as much as most other mass produced cars and, on certain models, they drop in value like a stone.
Have you considered what your new Peugeot would be worth after 6 months on the road?
Well, here’s the deal!
For example, a brand new shiny Peugeot 308 costing £18500 at retail showroom prices would devalue by over £3000 in a matter of minutes due to the VAT element within the original purchase price. Coupled with 6 months of depreciation at around 2% per month, your brand new pride and joy has just lost over five grand by the next plate change.
You may think so what, I’m not planning to sell my new Peugeot after just 6 months!
That may be the case, but what if some careless fellow road user smashes into you and writes your car off, or some light fingered car thief decides to take your car without asking, resulting in a total write off. In both cases, you are left with the possibility of your insurance company doing what insurance companies do and paying you the current market value for your car, which could be a whole lot less than you paid for it when new!
So what can you do to protect your investment?
You can take out a fully comprehensive insurance policy that has a new for old clause. There are a few insurance companies that provide cover for depreciation, however with motor insurance premiums rising as they have been recently, most consumers are looking for the best insurance quote and rarely stop to consider such facts.
You could hope that your car does not get stolen, or written off due to accidental damage. Statistically, there is a fair possibility that you could experience the displeasure of an insurance claim based on current vehicle crime levels and the propensity for insurance companies to write-off vehicles nowadays due to the high cost of repair.
You could also consider taking out a gap insurance policy for you Peugeot, such as a return to invoice policy, which would pay you the difference between the insurance company valuation at the time of the loss, and the full invoice price of your new Peugeot.
With current levels of car depreciation and the increasing risk that your car could be written off, gap insurance should be on your shopping list when buying a new car.