gap insurance for motor vehicles

tom188

see here http://www.autotrader.co.uk/CARS/owning/what_is_gap_insurance.jsp

jennifernil

As well as finance gap and back to invoice gap there is also replacement vehicle gap, which will give you a vehicle the same as the one written off or stolen. So if it was new when you bought it you would get a new vehicle.

You can get cover for up to 4 years , usually with a maximum benefit of £25000. But for a new car costing say £40000 that cover would cost you about £420.

A neighbour of ours had a just under 3 years old Merc stolen, never recovered. They got the market value from their car insurance and a top up to the original price from the gap insurance, they had return to invoice cover.

Helonearth

I just thought I would add my experience on to this thread as it seems that few people have had first hand experience.

I bought my car in May 2004 on finance through alliance & leicester. I took out GAP cover with A&L as coming from a car finance background I knew it could come in handy. The finance was based on three years with a large payment on the 36th month.

In December my car was written off in an accident. The GAP cover has settled the finance, including my excess. This is despite the fact that liability is still in dispute under the insurance claim. This has been a massive weight off my mind and has meant I could buy a replacement vehicle rather than having to spend money on settling the finance and the excess.

From personal experience I would recommend taking out GAP cover, but as with all insurance policies, READ THE POLICY WORDING!

Hel x

Foggy

Another GAP question.

I have just bought a six month old car from VW. They tried to sell me RTI GAP at £299 to which I said no thanks. I said I could get it elsewhere for £180 so they gave me the difference as further discount off the car (even though that had not been possible half an hour before:rolleyes: ).

Anyway I pick up the car tomorrow but so far have no documentation regarding the RTI GAP insurance. I am thinking that I should be able to cancel their £299 insurance anyway under the 14 day cool off period.

Is this right or have I missed something?

millsy17

Hi - I recently purchased a 2nd hand car (one year old) from a dealership and was offerend something called GAP insurance. I was quoted £400 for the GAP insurance which would last 3 years - I did some online research and found a company who offered the same product for £94 - essentially, I like the idea of GAP insurance and I bought the cheaper version!!! Told a member of my family and she has just bought a new car and said she was offered GAP insurance too - she didnt take it and has the details of this other company to phone!!

dacouch

Good advice Millsy17.

Did you realise that the car dealer would have also added their expensive Gap Cover to your finance agreement and you would have paid interest on it for the duration of your loan which would have added between £100 and £200 to the premium.

I hope you bought a "Back to Invoice" Gap Policy as these are normally the best.

So people on MSE follow Millsy17's advice and don't buy GAP Cover from the dealer or the finance company just shop around on the internet, you will be amazed at the saving. If the dealer did sell you Gap Cover you normally have a 14 day cooling off period to cancel it so its possible you can cancel it and take out a cheaper policy

millsy17

Dacouch - thanks, I did buy a back to invoice policy - for a car that cost 9995 I would receive at least 7995 as this takes into account the payment from my own insurance company for the write off of the car - I would be happy knowing that I could afford to replace the car if anything happened. I am now telling everyone I know about it - even the fella who sold me the cheaper policy said that they still make about 10% profit despite it being so much cheaper so he couldnt believe how much profit the dealers would make at such a huge price!!!

dacouch

Because of the regulation by the Financial Services Authority the dealer tends to just deal with one Gap Provider as the Insurer normally has to ensure the dealer complies with the FSA regulations.

The dealer has a much bigger margin than 10% on the GAP policies, all the dealers I know make upwards of about £100ish on a £400 gap premium thats why they push it so hard.

If you have Back to Invoice Cover it should pay the difference between what your Car Insurer pays you and what you paid for the car originally so if the invoice says £9995 for the car this should be the total amount you get (The Gap Insurers normally have a total limit of around £5000 on a £10000 car that they will make up the difference so it should be enough unless your car value drops really massively)

sizkar9

i think i'm out on my own here! took out gap insurance and wrote car off! insurance company paid me out in just over 3 weeks but gap because of data protection act had to get me to sign waiver so they could contact insurance company. kept telling gap i had received cheque from ins. co. but had not cashed nor verbally, nor in writing accepted it as full and final payment. gap then tell me that they not paying me out as i had accepted cheque in full and final settlement. when ins. co. played back the tape gap had asked had i disputed the settlement and NOT had i accepted this in full and final payment so gap had to re-open case. they owe me £779.00 and made ins. co. re-evaluate the car as they said i had been underpaid. letter from engineer to say they did not! gap now sent my complaint to underwriters as i have gotten financial ombudsman involved. person dealing with this at gap very hard to talk to as will not and cannot understand that i had put in writing from the beginning as i had said on the phone that i had a cheque from ins. co. but had not cashed it. I was under the impression if you don't cash a cheque it means you haven't accepted? please can anyone tell me if this is so? also an off-shoot company phoned me yesterday to say that because gap underwriters based in gibraltar, the financial ombudsman cannot deal with them for me and if i take it to court then there is so much small print that i would lose and i should just bank the cheque. bottom line is gap say i should have told the ins. co the cheque was not enough. my contract with gap was NOT to accept any payment as it was their job to get the ins. co to up their offer and then they would send me the balance. has anyone else ever had this problem as i've googled it like mad and if they have and are refusing payment then why are they mis-representing themselves and taking my premium? any advice from any of you would be gratefully received:mad::mad::mad::mad::mad::mad:

dacouch

Which Insurer is it with so we can have a look at their policy wording