Advice re Gap insurance please

bb69

Hello

Just wanted a simplified explanation on the difference between invoice and combined gap insurance.

Now the dealer said combined meant that I was paying for it in instalments... Hmmmmm :think:

Can anyone help?

I think I understand invoice being the difference between invoice price and what the insurance pay e.g car bought for £12k insurance pay £9k gap make up the rest to the original price paid?

No clue re combined.

Thanks in advance

Edit - If only I looked a bit harder before posting lol

Here it is for anyone else interested

Ford Insure Invoice GAP
Ford Insure Invoice Gap covers the difference between your motor insurance settlement and the original price paid for the vehicle including all factory-fitted accessories and any discount given, but excluding other extras, up to £20,000*. Cover is available on all Fords, whether you paid cash or financed your car.

*subject to terms and conditions

If your Dealer is authorised to sell insurance please ask him for more information.

Ford Insure Combined GAP
This policy will either pay your finance company the difference between your motor insurance settlement figure and the outstanding finance early settlement balance, or pay you the difference between the net invoice price of your insured vehicle at the start date and your motor insurance company’s settlement figure. In the event of your vehicle being written off during the period of combined cover, the policy will pay out whichever of the two is greater, up to a maximum of £20,000*.

I would assume option 2 the combined is best, as it doesnt tie me into ford cars in the future?

I am a little disappointed he didnt tell me what it really was, he seemed nice too and very helpful. Hope the rest of the car is ok :S

ahillsy

I'd recommend not taking out GAP insurance from a dealer. Way over priced.
Check out prices online first. Main ones to check are ala.co.uk and click4gap.co.uk

-monky-

yes bb69 you've pretty much got it sussed.

RTI Gap Insurance (Invoice Gap Insurance) covers you for the difference between your motor insurer's settlement and the original price you paid.

Finance Gap Insurance covers you to pay off any outstanding finance agreement on the vehicle after your motor insurer's settlement. This is because the vehicle may depreciate quicker than the repayments you are making, which means that if you write it off you may owe more on your finance agreement than the market value (yet you will only get market value from your motor insurer).

Combined Gap Insurance effectively combines RTI with Finance Gap Insurance and gives you the higher payout of the two.

bb69

ahillsy wrote: »

I'd recommend not taking out GAP insurance from a dealer. Way over priced.
Check out prices online first. Main ones to check are ala.co.uk and click4gap.co.uk

Hi there

Thanks - I had a look online before, but didnt recognise any of the companies so felt unsure.

I'll look again though thanks

bb69

-monky- wrote: »

yes bb69 you've pretty much got it sussed.

RTI Gap Insurance (Invoice Gap Insurance) covers you for the difference between your motor insurer's settlement and the original price you paid.

Finance Gap Insurance covers you to pay off any outstanding finance agreement on the vehicle after your motor insurer's settlement. This is because the vehicle may depreciate quicker than the repayments you are making, which means that if you write it off you may owe more on your finance agreement than the market value (yet you will only get market value from your motor insurer).

Combined Gap Insurance effectively combines RTI with Finance Gap Insurance and gives you the higher payout of the two.

Hi there
Thanks - does that still count if no finance has been taken out on the car?

ahillsy

bb69 wrote: »

Hi there

Thanks - I had a look online before, but didnt recognise any of the companies so felt unsure.

I'll look again though thanks

That's understandable - I was in the same boat. But after a bit of research, I kept coming across mentions of those 2 mainly. I went with ala.co.uk as they came out cheapest - you can get quidco cashback on both of those too btw!

-monky-

bb69 wrote: »

Hi there
Thanks - does that still count if no finance has been taken out on the car?

if there is no finance on the car then I can't see any point in you taking out Combined Gap insurance.

In fact, without finance at all you may consider not having Gap insurance at all.

for example, you buy a car outright, run it for a year and then write it off. With RTI Gap, you will effectively get a brand new car in replacement for your 1yr old write off. Without RTI gap, you will get enough money to buy another 1yr old equivalent, essentially replacing like-for-like.

IMO Gap insurance is only worth it if you are buying a car on credit (unless you really want a brand new car regardless of when you write off your old one!)

bb69

Thanks
Still wondering why the dealer didnt just explain when I asked (he did explain previously though in simple terms).. Maybe he was sick of my questions lol

-monky-

this is quite a good reference

http://www.moneyhighstreet.com/feature/what-is-gap-insurance/

bb69

-monky- wrote: »

if there is no finance on the car then I can't see any point in you taking out Combined Gap insurance.
an
anIn fact, without finance at all you may consider not having Gap insurance at all.
an
anfor example, you buy a car outright, run it for a year and then write it off. With RTI Gap, you will effectively get a brand new car in replacement for your 1yr old write off. Without RTI gap, you will get enough money to buy another 1yr old equivalent, essentially replacing like-for-like.
an
anIMO Gap insurance is only worth it if you are buying a car on credit (unless you really want a brand new car regardless of when you write off your old one!)

an
Confused.com lol
The car is used just under 2 years, does this make a difference?
an

-monky-

bb69 wrote: »

Thanks
Still wondering why the dealer didnt just explain when I asked (he did explain previously though in simple terms).. Maybe he was sick of my questions lol

He probably didnt explain because he is a salesman and is trying to make as much commission as possible. as ahillsy has pointed out, dealer Gap prices are often inflated so dealers make a fortune off Gap Insurance - especially as the majority of people will never ever claim.