Gap insurance on car - worth it?

jimpix12

Hi guys

I'm getting a 6 month old car at the end of this month. I've got everything sorted, from how much insurance and tax will cost to running costs. Only thing I'm not sure on, is: is it worth buying GAP insurance?

If I buy from Vauxhall they rip you off, my mate paid £400 for his, but I know you can get it cheaper from dedicated companies. Best quote I've found is £145 covering up to £15,000 (purchase price). I'll be putting about half on finance (loan) and the rest trade-in/deposit.

Just wondered if anyone felt it was worth it or not at that price - and if it was worth getting Return to Invoice GAP or the cheaper Finance GAP? Thanks in advance

tictax

Finance GAP will only cover the difference between the insurance payout and the outstanding finance balance.

As you are putting in half of the money through trade-in/deposit you would be better off with return to invoice GAP.

jimpix12

Hi tictax, Thanks for your advice but I dont understand If I go for return to invoice GAP wouldn't that mean they'd pay the difference between the insurance payout and the purchase price? SO if I crashed it 2 years from now I'd get the insurance payout plus the full RRP - so in effect I'd be better off and would "profit" from it? I am confused

tictax

remember that if you take out finance on the vehicle that would need to be settled as well. i thought that gap insurance only covers the difference. have you read all the faq's that the insurer provides?

tehone

this site explains the options quite well - i got mine from there

http://www.click4gap.co.uk/

Zapp_from_Planet_Zogg

spunko

In answer to the question - is it worth it?

Well, what would you do if you had the car written off in 2 years time when it was worth £7000, and, in your case, you still owed around £2000 on finance? (Bearing in mind that you will have blown £7000 of your own cash.)

The higher the value of the car, the more 'worth it' it is.

Definitiely RTI Gap is the best. In a claim you will get the difference between the insurance payout and the invoice value.

The invoice value is the total of the windscreen price of the car and the total interest and finance charges.

So, with RTI gap (provided you have the right cover level - estimate the likely depreciation on the car to see what the worst case would be), you will definitely have cash in your pocket when the finance has been cleared. If you chose the right level of cover, you could jump in to another identical car and finance package with no money lost.