GAP Insurance on pre-reg car?

fox2319

I'm looking into buying a car and have seen an offer for the model I want being offered at around £600 less for a pre-registered car. If I buy this car, I'd want GAP insurance so that I could get a like for like replacement if it's written off but I was wondering if anyone has had any experience with this on a pre-reg? (Even more interested if anyone has had experience of claiming on this)

Ta in advance

forgotmyname

Depends on the companies terms and conditions. You need to ask them and get it in writing before you commit to that company.

BJV

You need to check the terms and conditions very carefully. It will also depend you the first registered owner is.

E.g Some Gap Insurance policies will treat your vehicle as if it is brand new when you need to make a claim if you have bought the vehicle within 90 days and the garage was the first registered keeper. Some will not and you need to check before you buy anything,

You also need to check who gets paid. As some suppliers will pay a dealership and some will pay you.

Remember that no matter what the promises guarantees it is only what is written in the terms and conditions that will count when you need to make a claim so read them carefully.

You might also want to check if your own insurance company offers you new for old within the first 12 months. Although this is normally only for brand new vehicles some still offer it. If they do you may want to look at some form of a deferred vehicle replacement policy as you may be able to save a few extra pounds.

chieffy72

GAP (VRI) will make sure you get back the invoice price of the car regardless of wether it's new,pre reg or used,make sure you get GAP plus VRI (Vehicle Return to Invoice) rather than just Finance Shortfall. BTW,are you taking finance or paying cash? In my experience (8 years selling new cars) it doesn't always make sense to go for pre reg over new especially on smaller stuff. Lower interest rates,deposit allowances and a little bit more discount can get you a new one for similar money sometimes.

BJV

Think the might be some confusion

VRI ( vehicle replacement ) will take you back the amount you would need to spend to buy another the vehicle the same age mileage and spec as yours was on the day you bought it. In most cases if you bought a 4 month old car you would get the money to replace a 4 month old car not a new one. So this is why you need to check as some providers allow a pre reg car to be treated as a brand new one within a certain time frame.

RTI or back to invoice will only take you back to the invoice price you paid nothing more and nothing less.

So if you have bought a pre reg and it is less than 90 days old it would be worth looking a VRI as with some providers you will be given the cost of a new car which we all know will be alot more than the pre reg you paid for.

Hope this helps??

chieffy72

I beg to differ. You buy a car for £12000,gets written off after three years,insurance company pays you market value,e.g.£8000. GAP (plus VRI) pays you £4000. They won't pay you £6000 because the car you bought initially should have been £14000.

BJV

If you come from a dealership background as I once did you will know that most forms of gap insurance offered by dealerships are a form of return to invoice. ( I started by selling cars, business manager , sales manager then DP for a very large dealership for a German car maker ) Even more confusing is that some dealership groups or manufacturers call their type of return to invoice gap insurance VRI.


Google VRI or vehicle replacement insurance. You will find gap insurance suppliers who will cover the cost not only of the depreciation of your current vehicle but also the appreciation of the cost of a like for like vehicle.

So for example if you bought a pre reg vehicle within 90 days and paid £10,000. Two years later the car is written off. The cost to buy a brand new car the same spec is now £14,000 you would in fact between your own insurance company and your gap insurance provider be returned to the £14,000.

Under insurance laws you can not benefit from a claim and you are not instead you are simply being put back in the same position as you where when you drove home from the dealership.

In fact which money has recently done a report on this level of cover.

http://www.which.co.uk/money/insurance/guides/gap-insurance/vehicle-replacement-gap-insurance-review/ have a read if you can it explains it a lot better than I could

chieffy72

You're right about one thing........it's confusing! To be fair a lot of new rules came about 18 months ago which should make things easier for dealers and customers alike.The dealership I work for and the GAP provider we use doesn't provide Vehicle Replacement Insurance as far as I'm aware,just Return to Invoice and Finance Shortfall. The price difference between the two is negligible so my advice would be to pay a little more and go for VRI.We charge £320 for a 4 year GAP (VRI) on a £15,000 purchase which is hardly extortionate,adds about £8 per month to a typical 48month finance agreement.

BJV

The easiest way is to ignore what name the dealership or provider uses and just look at what it covers. If it is just protecting the invoice or in fact the replacement cost.

Buying independently can also save money as instead of being charged 20 % insurance premium tax you will be charge 6% and that alone is a big difference.