Is Gap Insurance worth taking out on new ish car?

dacouch

CKhalvashi wrote: »

Nope, I've just bought mine outright, and there's GAP on there of £47,480 (list price) and not the £41000 I paid for it.

Bearing in mind that 2 years/150k miles down the line means if it gets written off, I get a new one (I've got an XF Sportbrake, but you're looking about £13000 for an XF Saloon at 2/150, so about the same) then it's £35000-ish I haven't got to find. Bearing in mind I'm probably keeping this for 3 years, £495 really is worth the risk on 200,000 miles, as with my driving record, there's a 50% change of having a smash based on mileage alone.

CK

He was talking about finance gap which pays the difference between finance and insurance settlement and the Return to Invoice which pays the difference between what you paid and insurance settlement.

You have (Or would need) Vehicle Replacement Insurance for what you need. Your car Insurer would normally replace with a new car in the first year anyway

BJV

Gap Insurance is just like any other insurance. It is about the risk. The risk of what happens if your car or van or what ever is written off.

You are paying someone else to take the risk for you.

Some people will never see the benefit and that it up to them it is their car, their money and them who will be left with any financial shortfall or having to use savings.

Personally for the sake of pennies in comparison to car insurance compared to what could be a massive problem I think it is a good idea.

Even if I was lucky enough to have cash lying around spare in the bank I would rather use it for something else other than either paying off finance or putting it towards buying another car.

olly300

dacouch wrote: »

Your car Insurer would normally replace with a new car in the first year anyway

The car isn't new it's "nearly new" or second hand.

As it's not completely new the insurer will only pay the cost of the car's value at the time it was written off.

This was specifically explained to me when I brought my car and changed the insurance policy with one insurer, and also when I renewed the policy for a year with another insurer.

In regards to risk - if you do a lot of motorway driving even if it's a short distance on the motorway I would take out GAP insurance. It doesn't matter if you are a good driver as if someone goes into the back of you with some speed then there is nothing you can do.

dacouch

olly300 wrote: »

The car isn't new it's "nearly new" or second hand.

As it's not completely new the insurer will only pay the cost of the car's value at the time it was written off.

This was specifically explained to me when I brought my car and changed the insurance policy with one insurer, and also when I renewed the policy for a year with another insurer.

In regards to risk - if you do a lot of motorway driving even if it's a short distance on the motorway I would take out GAP insurance. It doesn't matter if you are a good driver as if someone goes into the back of you with some speed then there is nothing you can do.

I was specifically replying to CKhalvashi's post.

I'm not entirely sure what you're refering to but the majority of Insurers policies agree to replace a written off car with a brand new car if it's written off in the first year of ownership from new.

Some offer the above for the first two years of ownership from new and some will ignore pre reg eg first registered in dealerships name before you bought it as "new"

BJV

dacouch wrote: »

I was specifically replying to CKhalvashi's post.

I'm not entirely sure what you're refering to but the majority of Insurers policies agree to replace a written off car with a brand new car if it's written off in the first year of ownership from new.

Some offer the above for the first two years of ownership from new and some will ignore pre reg eg first registered in dealerships name before you bought it as "new"

Your are right some do offer new for old for up to 2 years.

But

The cost implications however means that more and more insurers are pulling away from this in fact what used to be a perk of buying a new car is now almost an exception to the rule.

Those that do sometime have terms and conditions and mileage limitations. For example one very large insurance company will offer new for old but if the vehicle is not available in the UK they will not factory order and will instead revert back to market value.

With reference to your gap insurance I would check who the first owner is and how long since the vehicle was registered. Some on line suppliers will still treat your vehicle as a new car if you bought the car within 90 days of registration and the first owner was the garage.

This can make a massive difference if you are looking at vehicle replacement.

Streeet

Having written my car off earlier this year in the recent floods, I've just replaced it and chose again not to get GAP insurance.

Generally a car is a depreciating asset and you'll rarely get back what you paid for it. That's something everyone accepts.
If you setup finance to cover the vehicle depreciation as a minimum, if you're unfortunate to lose your car, then you'll not 'lose' any money based on your standard insurance cover.

My general insurance gives me market value to replace like for like. As such I've just replaced my 2009 vehicle with another 2009 vehicle (same spec etc etc). Sure if I had taken GAP insurance I'd now be driving a 2010 vehicle which would be nice.. but that wasn't part of my original plan so I'm not unhappy.

The £600 I've saved over both occasions in GAP insurance is now also happily covering the increased insurance premium following the write off.