cancel
Showing results for 
Search instead for 
Did you mean: 

Gap insurance

Community Veteran
Posts: 7,149
Thanks: 51
Fixes: 2
Registered: 30-08-2007

Gap insurance

The finance company covering the purchase of my latest car has offered me "gap insurance". This is of the several types available "return to invoice".

Should the car be written-off or stolen unable to recover, the insurance will cover the difference between what my insurance will pay out for a complete loss (the market value at the time of loss) and the amount the car was sold to me at.

An example given to me: for a new car at say £12,000 and a total loss after 18 months, with comprehensive insurance would see in the order of a £4,800 pay out, most likely not enough to get even close to the outstanding finance balance.

I've not heard of this before, it sounds good on paper, but it is really any good. Do any members have any experience of gap insurance?

Yes, I know that some forms of comprehensive insurance include a like for like cover, but its pretty expensive.

Experience; is something you gain, just after you needed it most.

When faced with two choices, simply toss a coin. It works not because it settles the question for you. But because in that brief moment while the coin is in the air. You suddenly know what you are hoping for.
5 REPLIES
Minivanman
Hero
Posts: 4,794
Thanks: 1,046
Fixes: 1
Registered: 04-11-2014

Re: Gap insurance

Just asked my little brother about this - he was in motor insurance for a lot of years.
 
 
"Most depreciation on cars occurs in the 1st year. most car policies do a "new for old" if the car is less than a year old so in that case they extra insurance would not be worth it. however if the car is not new then it might be worth it, depends on how much the gap insurance is and how much value your car will lose in the 1st year you have it"
All views expressed are my own but you can express them too if you want to be right about everything like I am.
Community Veteran
Posts: 7,149
Thanks: 51
Fixes: 2
Registered: 30-08-2007

Re: Gap insurance

Thank you. The car is not new. The gap insurance covers the finance period and for a further eighteen months after the finance matures.

My one niggle with this is that the Gap insurance company insist that in the event of a serious accident I deal with them first, and they claim on my behalf. Having spoken to my car insurance company, they don't like this one little bit and insist that the first point of call must be to them. Which I think is right.

I am currently in my fourteen day cooling off period for the gap insurance. I intend to take issue with them tomorrow about this seemingly insoluble problem.

Experience; is something you gain, just after you needed it most.

When faced with two choices, simply toss a coin. It works not because it settles the question for you. But because in that brief moment while the coin is in the air. You suddenly know what you are hoping for.
acr
Rising Star
Posts: 217
Thanks: 11
Registered: 06-04-2007

Re: Gap insurance

When I bought a new car a few years ago I bought GAP insurance online with ALA.

 

https://www.ala.co.uk/gap-insurance

They were much cheaper than was being offered by the dealer and had good reviews online. They might be worth a look.

 

Community Veteran
Posts: 5,322
Thanks: 467
Fixes: 1
Registered: 21-03-2011

Re: Gap insurance

Have the Insurance companies not learnt from PPI? I was offered it on the one year old Audi I bought secondhand for cash. It first year depreciation had passed.  It seems the primary insurers are cheating a bit with their valuations and at  the very least should offer a "new for old".  The Gap Insurance is only relevant with the people buying new cars on credit.

Now Zen, but a +Net residue.
Infinity
Pro
Posts: 5,601
Thanks: 148
Fixes: 2
Registered: 19-06-2011

Re: Gap insurance

Years back, when I purchased  previous New cars on Finance, I was told by the Dealer NOT to buy GAP insurance, as it was designed to cover the difference   in value to the finance company....

 

And...

GAP insurance is probably not suitable if…

 

Your car is less than 12 months old and you’re the first registered owner

 

GAP insurance only pays out if your normal car insurance company says that the car is written off or unrecoverable.

 

Interesting advise here :

 

 

https://www.moneyadviceservice.org.uk/en/articles/do-you-need-gap-insurance#what-is-gap-insurance