GAP insurance help needed

boliston

real1314 wrote: »

If you buy a new car for £15k using a 5 yr personal loan of £14k, then after 14 months and 30,000 miles you write the car off, chances are you'd be looking at a pay-out of under £10k, maybe as low as £8k, but you'd still be paying out on a balance of £13k or so.

That's why SOME people consider gap insurance......

You mean they make you pay the £13k as a lump sum? If you simply continue to make they payments monthly then I can't see any problem as this will already have been budgeted for.

dacouch

boliston wrote: »

You mean they make you pay the £13k as a lump sum? If you simply continue to make they payments monthly then I can't see any problem as this will already have been budgeted for.

The issue is you receive the market value of the car say £10000 but you may have say £13000 outstanding on the finance including the interest payments so your £3000 out of pocket and have no car.

Straight forward Shortfall Gap Cover is designed to cover the £3000 shortfall

boliston

dacouch wrote: »

The issue is you receive the market value of the car say £10000 but you may have say £13000 outstanding on the finance including the interest payments so your £3000 out of pocket and have no car....

When you say you "have no car" surely they will still replace your written off car with one of similar age and condition.

dacouch

If the loan is secured on the loan then they will send the cheque straight to the loan company and generally the loan ceases and your left without a car but still owing the loan company the outstanding amount. If it's a personal loan and is not secured on the vehicle then they send you the cheque.

smitchy73

Most insurers will only pay out the market value, we all know that if you buy a new car, it drops in price the minute you drive out the showroom, so therefore if you have a crash(god forbid) the minute you drive out, then what your insurer will pay out will be less than the finance just set up to buy the car.