'Negative equity'? in GAP insurance

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uumode

MB Enthusiast
Joined
Sep 1, 2003
Messages
1,587
Car
C300 AMG Line Premium Plus
Can't get my head around the concept of 'negative equity' in car value in relationship to GAP insurance.

Copy here from GAP insurance company;

Customer Purchase Additional Options

Negative Equity (NE)
Subject to an additional premium being paid (identified by ‘Negative Equity’ in
the additional option section of the policy Schedule) cover will include up to a
maximum of £2,000 Negative Equity carried forward from a previous agreement financed within the original finance agreement.


GAP insurance what is not covered:
.....
3. Negative Equity (unless an additional premium has been paid [above]) or the cost
of fuel, surrenderable road fund licence and salvage value

basically don't understand :)
 
Google "lump and bump".

Was popular in the "never had it so good" Tony Blair days to take NE from agreement and lump it into the next, i.e. add money to the finance on your new car to pay off the last one.
 

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