Friday, 13 January 2012

Company cars are a vital asset

Company cars are crucial for many Shropshire firms, but could your business continue without them?

Stuart Haynes from our commercial team said a company car was for many an essential business tool. "Whether you use it just to get to and from work, or to visit customers and suppliers, if for any reason you, your directors or your employees were without a car for any time, it could cause real disruption.

"So that's why comprehensive car insurance is important - the aim is that if your car is stolen or written off, you'll receive compensation so you can get back on the road as soon as you can.

"But given the way cars depreciate heavily from the moment they leave the garage forecourt - on average a new car loses 48% of its value in just three years - your insurance payout many not be enough to purchase a new vehicle.

"And even worse, if you bought your car on hire purchase or a loan, your payout may not cover the balance you owe, so you'll be paying for a car you don't have anymore and you'll have to find more money for a new one."

But Stuart said gap insurance was available to help settle the balance owing on any finance arrangement - although inevitably it came at a price and hte more cover you want included, the more the policy would cost.

"It's not a new idea, but with the way new vehicles are depreciating, gap insurance is becoming increasingly popular. Don't just assume though that your car dealer is offering the best policy - shop around to make sure you get the best value deal."

Stuart said some comprehensive car insurance policies offered to replace a car as new if it was written off or stolen in the first 12 months, so it was important to check the small print.

"If your policy offers this, there's no need to double up on insurance, so only take out a gap policy after the right to a replacement vehicle has ended. Your company car is an important asset, and for the sake of your business, you need to ensure you protect it as best you can."