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  • FIRST POST
    daysleeper
    gap insurance for motor vehicles
    • #1
    • 19th Dec 04, 8:11 PM
    gap insurance for motor vehicles 19th Dec 04 at 8:11 PM
    Official MSE Insert:

    If you've arrived from Google, our Gap Insurance guide may be helpful.

    Back to the original post...

    I ve just bought a brand new car after my old one was hit by a lorry and written off. This has left me out of pocket as the insurance payout was not very good. I have heard about GAP insurance which covers the difference between market value and original price. Can anyone give me the pro's and cons of this insurance and is there any reputable companies that could be recommended
    Last edited by MSE Zorica; 18-01-2016 at 4:11 PM.
Page 1
  • MarkyMarkD
    • #2
    • 20th Dec 04, 2:44 AM
    Re: GAP insurance for motor vehicles
    • #2
    • 20th Dec 04, 2:44 AM
    It doesn't do what you think it does.

    For one thing, if you bought a brand new car and had it written off within a year, your insurer would replace it with a brand new one.

    Once it's over a year old, there's no way anybody is going to pay for you to get a brand new car.

    What GAP insurance does is cover the gap between the insurance payout (based on current value) and the outstanding balance on a loan to fund the purchase. So it avoids you being left with no car and a partially outstanding debt.

    You would still not have the money to buy another brand new car - but you would at least not have a debt around your neck.

    Normally the lender would offer it to you if you purchased a car on a car-related loan. You can get it stand-alone, though - a quick Google reveals one company offering it for a fixed price of £168 on any car: here.
  • Malestrom
    • #3
    • 2nd Jan 05, 6:55 PM
    Re: gap insurance for motor vehicles
    • #3
    • 2nd Jan 05, 6:55 PM
    The other problem with getting GAP insurance from a dealership is that you can find that the money paid out by the insurance is given as a credit against a replacement car from that dealer, rather than actual cash in your hand. Therefore, should you have to claim, you then have to buy another car from the original dealership. This was in VERY small print on the GAP insurance that we had when we bought a car a few years ago....luckily we didnt need to claim.
  • daysleeper
    • #4
    • 3rd Jan 05, 1:55 PM
    Re: gap insurance for motor vehicles
    • #4
    • 3rd Jan 05, 1:55 PM
    Many thanks, it seems well worth taking out, I can't believe it is not common knowledge. I agree about the dealer version of insurance. It is very overpriced, as I imagine they take a nice chunk of commision for themselves.
    I have found a policy for £199 for 3 years which pays the difference between what the insurance gives you for book price of your vehicle and the invoice price. Take it from me its a small price to pay
  • MarkyMarkD
    • #5
    • 5th Jan 05, 2:24 AM
    Re: gap insurance for motor vehicles
    • #5
    • 5th Jan 05, 2:24 AM
    d514

    Thanks for your informative post - I didn't realise that the upgraded options you mentioned were available, as well as the basic GAP cover which just covers the finance shortfall.
  • AWOL
    • #6
    • 17th Jun 05, 3:10 PM
    GAP insurance (merged)
    • #6
    • 17th Jun 05, 3:10 PM
    Gap insurance for cars. Are they worth while!!!
    Any good deals out for them.

    This is how they work!

    When you buy a new car - if its ever written off or lost and never recovered, Gap insurance will pay the difference betweem what the insurance company pays out and the invoice value of your car.

    So eg. Buy a new car £20000
    Two years later its written off. Insurance value the car and give you £10000.
    You might still owe money to finance etc maybe another £12000 so you still end up paying £2000 finance for a car you dont have!! Not a nice position to be in.

    Gap insurance would give you the difference between the insurance payout and the invoice price. Thus they pay you another £10000. So basically you have the invoice price back. And your free to go and buy yourself another brand new car. Sounds good doesnt it?

    Is this sort of scheme a good one? Whats your views? Anyone taken one of these out? Do the insurance companies pay out quickly? Stupid question i know!! ha.

    www.click4gap.co.uk
    Last edited by savvy; 19-03-2006 at 2:57 PM.
    • Savvy_Sue
    • By Savvy_Sue 18th Jun 05, 1:38 AM
    • 36,621 Posts
    • 32,801 Thanks
    Savvy_Sue
    • #7
    • 18th Jun 05, 1:38 AM
    • #7
    • 18th Jun 05, 1:38 AM
    Worth looking on Honest John for this: I know questions have been asked about GAP insurance in The Back Room because that's where I looked when I was wondering whether or not to take it out.

    FWIW, we took out the 'middle' level, ie back to invoice level rather than full price of similar spec new car. Haven't had to claim yet ...

    PS, forgot to say we took it out separately rather than through the car showroom, about half the price. Showroom tried to tell us their deal was better, but IIRC they only offered the top level, which we thought was overkill.
    Last edited by Savvy_Sue; 18-06-2005 at 1:40 AM. Reason: PS
    I'm a Board Guide on the Cutting Tax; Charities; Small Biz & Charity Organisers; and Silver Savers boards, which means I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. However, do remember, Board Guides don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com. It is not part of my role to deal with reportable posts.

    Any views are mine and are not the official line of moneysavingexpert.com
    Still knitting! 1st cardigan done, abandoned another, knitting baby bootees instead ...
  • CLIVELESTER
    • #8
    • 20th Jul 05, 10:08 PM
    "GAP" Insurance
    • #8
    • 20th Jul 05, 10:08 PM
    I understood that when you insure your vehicle that the Insurance Company undertook to "indemnify" the customer against any loss. The insured should neither profit or lose in case of claim. So I find it strange to see Insurance Companies offering Gap Insurance. Apparently this is the difference between what you are paid as a result of claim & the actual cost to replace your vehicle. Any experts out there that can reconcile the two ?
    • blue_haddock
    • By blue_haddock 20th Jul 05, 10:18 PM
    • 11,761 Posts
    • 18,423 Thanks
    blue_haddock
    • #9
    • 20th Jul 05, 10:18 PM
    • #9
    • 20th Jul 05, 10:18 PM
    There are two types of Gap insurance - one which pays the difference between the insurance settlement and any finance owing on the vehicle and the other which pays out the difference between the settlement and the original invoice price of the vehicle.

    So in case 1 your paid out £3000 from the insurance and you owe £4000 - the gap payment would be £1000. In case 2 your paid out £3000 still but because you originally paid £9000 for the vehicle the gap payment would be £6000.

    The price difference between the two should be fairly minimal and i know which one i prefer.
  • shieldshaker
    Gap insurance
    Hi, Folks,
    I'm new to this so If I am going over old ground please point me in the right direction.

    I am in the process of buying a new car and the dealer is offering Gap insurance to cover the additional potential loss above that which my insurer will pay if the car is written off within 3 years and the original purchase price.
    Is this a policy woth having or is it another insurance rip off. The cost is £399 for 3 years cover.
    Cheers.
    • Savvy_Sue
    • By Savvy_Sue 3rd Oct 05, 12:04 PM
    • 36,621 Posts
    • 32,801 Thanks
    Savvy_Sue
    If you decide you want it, you can get it online, may not be any cheaper but there are various levels of cover and you may decide you don't want the top level (which is almost certainly all the salesman will offer).

    The key questions are, how are you paying for the car? and how would you replace it if it was written off before you'd finished paying for it?

    We've taken it out at the level where it settles the finance if the car is written off before we've finished paying for it.

    Of course others will be along before long to say "Don't buy new, the depreciation the moment you drive off the forecourt is horrendous" etc etc etc. They are of course right.
    I'm a Board Guide on the Cutting Tax; Charities; Small Biz & Charity Organisers; and Silver Savers boards, which means I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. However, do remember, Board Guides don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com. It is not part of my role to deal with reportable posts.

    Any views are mine and are not the official line of moneysavingexpert.com
    Still knitting! 1st cardigan done, abandoned another, knitting baby bootees instead ...
    • nadnad
    • By nadnad 3rd Oct 05, 8:19 PM
    • 1,561 Posts
    • 1,394 Thanks
    nadnad
    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
    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.
    I really must stop loafing and get back to work...
    • Judgebread
    • By Judgebread 15th Oct 05, 2:28 PM
    • 8 Posts
    • 1 Thanks
    Judgebread
    Motor Gap insurance
    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
    • By Savvy_Sue 15th Oct 05, 3:01 PM
    • 36,621 Posts
    • 32,801 Thanks
    Savvy_Sue
    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?
    I'm a Board Guide on the Cutting Tax; Charities; Small Biz & Charity Organisers; and Silver Savers boards, which means I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. However, do remember, Board Guides don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com. It is not part of my role to deal with reportable posts.

    Any views are mine and are not the official line of moneysavingexpert.com
    Still knitting! 1st cardigan done, abandoned another, knitting baby bootees instead ...
  • shieldshaker
    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
    GAP insurance for cars
    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
    • By zfrl 10th Nov 05, 12:06 PM
    • 602 Posts
    • 492 Thanks
    zfrl
    GAP/RTI Insurance
    Hi,

    I've taken out RTI insurance with 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 -
    Guaranteed Asset Protection - this is for when you have taken out finance to buy the car.

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

    Make sure you buy the right one.

    "You have enemies? Good. That means you've stood up for something, sometime in your life." Winston Churchill

  • Cromlech
    GAP Insurance
    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.
    Celebrating 31 Years of Muppetry
    • Savvy_Sue
    • By Savvy_Sue 21st Nov 05, 10:27 PM
    • 36,621 Posts
    • 32,801 Thanks
    Savvy_Sue
    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!
    I'm a Board Guide on the Cutting Tax; Charities; Small Biz & Charity Organisers; and Silver Savers boards, which means I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. However, do remember, Board Guides don't read every post. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com. It is not part of my role to deal with reportable posts.

    Any views are mine and are not the official line of moneysavingexpert.com
    Still knitting! 1st cardigan done, abandoned another, knitting baby bootees instead ...
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