Gap Insurance and scrappage deal

auntyro

Have just decided to trade in my old banger and take benefit of the scrappage deal - I'm lucky I don't need any finance. Was wondering about gap insurance and how it would work in this situation. If I'm going to fork out for insurance I would want it to cover any difference between the car insurance payout and the cost of a replacement car not what I paid on the invoice (there'll be a £2K difference). Any help would be appreciated.

Also does anyone know of providers who charge premiums depending on the cost of the car. At the garage it seemed to be a standard payment (£399) but this seems unfair if you're paying £5K for your new little car when someone else might be paying £20K for their car - presumably the likely "gap" could be much bigger?

Thank you!

lisyloo

Insurance does not cover you for what you paid on the invoice.
It covers you for your financial loss which is the "market value" of the car.
This usually instantly goes down when you drive a new car off the forecourt as it's no longer brand new and becomes used.

Almost certainly the garage is not the cheapest place to get this and you should shop around.

However have you considered if it is even worthwhile?
If you estimated gap is say £500 then is it worth paying £400 for insurance.
Wouldn't you be better off putting £400 in a savings account and then if you don't use it you still have £400.

Do you really need to get a brand new car again if your is stolen?
Could you not just tolerate a nearly new model.

Of course it's up to you, but I wouldn't buy this insurance personally.
I would either pay the loss myself or tolerate a slightly older car.

~Brock~

lisyloo wrote: »

Insurance does not cover you for what you paid on the invoice.
It covers you for your financial loss which is the "market value" of the car.
This usually instantly goes down when you drive a new car off the forecourt as it's no longer brand new and becomes used.

Almost certainly the garage is not the cheapest place to get this and you should shop around.

However have you considered if it is even worthwhile?
If you estimated gap is say £500 then is it worth paying £400 for insurance.
Wouldn't you be better off putting £400 in a savings account and then if you don't use it you still have £400.

Do you really need to get a brand new car again if your is stolen?
Could you not just tolerate a nearly new model.

Of course it's up to you, but I wouldn't buy this insurance personally.
I would either pay the loss myself or tolerate a slightly older car.

This is not strictly accurate - you can buy 'back to invoice' GAP which will cover the shortfall between your motor insurance payout (in theory, the market value) and the original price of the vehicle on the invoice.

In the case of a scrappage deal, as far as I am aware the £2k allowance will show as a deposit off the original invoice price so the GAP should cover this as well.

Armengar

Most insurance policies cover you for a car replacement in the first year. A quick look on click4gap costs £94 for a 3 year return to invoice gap and you can get £22.50 back from quidco.

It is up to you if you think £72 is woth it. Do you have finance on the 5k car? If so then a total loss could leave you out of pocket. Like most policies it is a "what if" policy. £399 seems rediculously extortionate though. The 2k scrappage is classed as a "trade in" according to morethan.

auntyro

Thanks Brock - that's what I'd wondered about - looks like some shopping around is in order.