Gap insurance for leased cars

Buttywoman

Anybody come across this before? I am being advised by my lease company that I need to take out 'gap insurance' to cover the remaining payments of my lease should the car get written off. I just assumed I would take out a new/continued lease (currently 4 years) if I was unfortunate to have a car written off, but was advised that I need this gap insurance as in the finance lenders eyes it is the end of that contract and this payment would need to be offset as well as the market value of the car. I am being quoted £251 for the whole period of the lease. My current insurance provider (Esure) does not provide this type of insurance.
Any advise, greatly received. thanks.

InsideInsurance

It normally is optional rather than compulsory but yes, you have agreed to enter into a lease for a certain period of time and there are penalties for terminating it early plus what the market value of the vehicle was/ is in the leasors eyes may well be different from the insurers.

If you google GAP insurance you will find many online providers who tend to be much cheaper. Do your research however as there is a vast difference in quality. Look in particular of what they define as the GAP - with the better policies it is the difference between the gross insurance settlement and the settlement figure from the finance company but with poorer policies it can be the difference between their valuation of the vehicle and the settlement figure from the finance company irrespective of what the insurer settled at (you can probably guess their valuation would be higher than the insurers).

Depending on what the vehicle is you may decide it is good value to buy it or that it isnt and run the risk - certainly the former organisation I worked with sold GAP and made massive profits from it but there were also certainly a lot of customers who were very pleased they had it when their car was a declared a total loss/ stolen not recovered.

Buttywoman

Thanks that's really helpful.