gap insurance for motor vehicles

nadnad · 3 October 2005 at 8:19PM

yeah I think its a good idea - specially if you're financing the car - my hubby sells cars and has had people sooo glad they got it - they had finance on the car at a high interest rate and the car was written off within a short space of time - of course the value drops as soon as you leave the showroom so the normal insurance won't cover the full price of the car - plus if you've got finance you could be left with a hefty leftover amount. If you're getting finance over say a few years the extra £399 doesn't put the payments up a terrible amount. Of course there will be others along in a while to say NO DON'T DO IT and definitely don't add it to your finance but thats just the way I look at it - that extra bit of protection and you don't really notice the difference in your monthly payments.

bunking_off · 3 October 2005 at 10:30PM

Personally, I think it's incredibly bad value...or high margin, depending which way you look at it - unless you're buying the car on a high APR, in which case you shouldn't be on this site.

First thing, policies don't typically pay out the difference between book value and the original purchase price - they'll do that in year 1, but after that they'll settle the finance which is something quite different. Even in year 1, the payout is the differential between book value and purchase price. Worst case situation is that the car loses 30%, say £6k on a £20k car. But what are the chances of writing your car off in the first year?

Compare this with your normal insurance - you're paying perhaps 3 times as much for your usual motor insurance, but that pays out perhaps 3 times as much if you write the car off. Additionally, it will pay out for any claim, not just those where the car's written off.

This isn't to say don't get GAP insurance, just be aware that it's an incredibly high margin product both for the dealer and the insurance company. The dealer doesn't make much money on the car...they make it on add-ons like this.

If you really do want it, shop around and go to a third party.

Judgebread · 15 October 2005 at 2:28PM

Is Gap Insurance all its cracked up to be??. I'm buying a new car(got £4000 off list price) and they are trying to sell me 3 years gap insurance at £439. I know what it is suppose to do but does it?? Also the insurance company Im covering the car with gives 1 years free gap insurance, can you buy it else where later on(if it is good).

thanks

Savvy_Sue · 15 October 2005 at 3:01PM

You can buy gap insurance later, but I'm not sure how much later, possible not as much as a year later. But you don't have to get it from the dealer. A google for "gap insurance" will come up with various options, and you have more choice that way. We've gone for the 'silver' option, which will pay off the finance rather than giving us back the list price of the car.

I believe it does what it says on the tin, so as to whether it's any good, that's for you to consider, especially the financial implications if your car was written off in the first 3 years. If you don't have it, have you still got a finance deal to keep paying?

shieldshaker · 20 October 2005 at 2:30PM

Hi there,
I have just gone through the mill with Gap insurance.
Basically there are 3 types of Gap insurance.
1. Gap insurance which pays off any outstanding debt if your insurer does not give you a decent pay out to cover your loss.
2. Return to Invoice (RTI) insurance which pays the difference between yur insurance pay out and the original purchase price of the car. Note this is what you actually paid and not the list price.
2. Vehicle repalcement gap insurance which will protect you from inflation and buy you the same car of the same specification regardless of the cost.
Go with Savvy Sue's suggestion and put a search in for Gap insurance on Google.
I was quoted £399 for 3 years cover on RTI insuarnce at the dealer with a maximum claim amount of £20K.
I can get the same cover from these two providers for £195.
Surf&protect.com
gapcover.co.uk
You can buy this type of protection up to a month after purchase and can also reduce the premium by reducing the maximum payout you can get. Remember Your motor insurance provider will give you this protection free for the first year if it is any good but the next couple of years are worth paying the premium for if you are likely to suffer big depreciation. And we all suffer from that.

puffyn · 10 November 2005 at 12:37PM

Hello everyone,

I am new to the forum as of today, can't believe how much reading i need to do, but i know it will be worth it.

Does anyone here have experience of GAP (guaranteed asset protection) insurance for cars.

I supposedly pays the shortfall between what the insurance company pay out, and the price of a brand new car / what you owe on finance.

Sounds good - but are there any catches? And does anyone know of a good provider? - I'm sure one would get ripped off buying it from the car dealer!

TTFN - puffyn

zfrl · 10 November 2005 at 1:06PM

Hi,

I've taken out RTI insurance with [size=-1]www.click4gap.co.uk I don't know if it's any use yet as I have not claimed. But the idea is they pay you the difference between what your insurance wants to pay you and what the car actually cost you.

GAP - [/size][size=-1]Guaranteed Asset Protection - this is for when you have taken out finance to buy the car.[/size]

RTI - Return to Invoice Insurance - this is for where you arrange your own finance or pay cash.

Make sure you buy the right one.

Cromlech · 21 November 2005 at 9:53PM

I bought a used car a few months ago, whilst in the process I ended up buying GAP insurance. May have to tweak my method of dealing with sales personnel

First question...

My understanding of GAP insurance is that should my car be written off or stolen then I make a normal insurance claim, they pay me what the value the car to be worth, and then I claim on the gap insurance for the difference between that and the price I paid for the car.

Is that correct?

Second question...

Is it worth it?

Details: 3 yr old car, purchase price: £6000, gap insurance: Total just shy of £1000.

Savvy_Sue · 21 November 2005 at 11:27PM

If you do a search on this board for GAP insurance you'll see that there can be different levels and you can buy it after the event. And a few comments on whether it's worth it or not.

Hopefully for £1000 you got the top level, where you do indeed get the difference between what the insurance pays out and what you paid for the car, and hopefully that applies for the next few years rather than just the first year. It seems a bit steep to me! But we bought the 'medium' level, after the event, and ours will pay the difference between the insurance write-off value and the outstanding finance. Whether it was 'worth it' remains to be seen ... hopefully we will never find out!

davido_4 · 22 November 2005 at 6:35PM

So is it a good idea?
I hate it when you are now worried about something you've never worried over.

It was simple buy a new car. Ist car for almost 8 years and lo... salesmen wants us to buy VRI for £339.

Now we are worreid we will write off the "new" car & bang goes a proportion of the car we just bought.

I have surfed and to have found that at gap-form.co.uk the same GAP policy is available for £154. But now i read that the insurance cover will cover the new for old price -mentioned in this forum -is that a standard policy .or does it only apply to new cars i.e. full replacement value?

Any advice greatly appreciated.
Confused husband of wife wiv "new" Toyota!
thanks
D

gap insurance for motor vehicles

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