Motorbike Gap Insurance & PCP

The question of Motorbike Gap Insurance has been raised regarding certain types of finance deals regarding motorbikes. The motor finance giant, Black Horse Motor Finance, , has an excellent form of finance available for motorbikes, called Personal Contract Purchase, or PCP for short.

The idea behind a PCP agreement is that you pay a deposit, make monthly installments, and at the end of the agreement you have a ‘deferred’ future value to the motorbike. The beauty of this is that you have serval options

  • You can pau the purchase figure or Guaranteed Furture Value (GFV), and the motorbike is yours.
  • You can trade the motorbike in and anything it is worth more than the GFV (your equity) can serve as a deposit for your new motorbike.
  • If you like, you can simply hand back the motorbike with nothing more to pay. This is even the case if the motorbike is worth less than the GFV.

So it sounds a pretty good concept, the finance company takes the risk on the depreciation, lets you have any equity, and the deferred payment means your monthly instalments are relatively low.

Which Motorbike Gap Insurance
Which Motorbike Gap Insurance ticks all the boxes for a PCP agreement?

But what if the motorbike is written off, you could still be laible for the shortfall on any finance settlement, and be left with no money for a new bike…..time for motorbike gap insurance to take centre stage!

What type of Motorbike Gap Insurance do you need?

Well actually you have a choice of levels you may want to look at.

  • Finance Gap Insurance - can cover the difference between the motorbikes market value and the outstanding amount on the PCP agreement.
  • RTI Gap Insurance - can cover the difference between the motorbikes market value and the original invoice price you paid.
  • VRI Gap Insurance - can cover the differnec between the motorbikes market value and the amount needed to replace the motorbike with the equivalent model at the time of policy purchase. So if you had a new Honda Goldwing and the price increases for a new one two years later, the vri gap insurance can cover the increased replacement cost.

The only real issue is choosing which one may be best for you, and also where to find it!

Lets look at why you may opt for Finance Motorbike Gap Insurance. If you put a small deposit into the PCP deal, then you may well owe more on the motorbike than the motorbike is worth. This is a key point, as if you owe less on the agreement than the motorbike is worth, then finance gap insurance would have no benefit to you in that case.

RTI Motorbike Gap Insurance will pay between the motorbike market value and the original invoice price you paid. So if you would like to cover this price, RTI Gap Insurance is a good option. Remember you will have to pay the outstanding finance settlement out of this figure.

VRI Motorbike Gap Insurance is a good option if you have a discounted deal, or you believe the price for that model is likely to increase in the future. VRI Gap Insurance can cover this increased price, regardless of that original price you paid.

So where can you get Motorbike Gap Insurance for a PCP agreement?

Well there are a number of options, Balck Horse Motor Finance themeselves do provide a Motorbike Gap Insurance policy, in a RTI Gap Insurance style.

You can also find Motorbike Gap Insurance from a number of independant online brokers, although the choice is again generally a form of RTI Motorbike Gap Insurance. For the best choice online, try, they supply all of the above types of cover, and as an added bonus they provide Motorbike Gap Insurance at the same premium price as a car.

Hope this helps and gives you some ideas on the choice of motorbike gap insurance for a pcp agreement.

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