Gap Insurance question.

xsupercarlx

I can get GAP insurance (Vehicle Replacement Cover) that will cover the gap between payout and cost of similar brand new car. This is also for used cars.

How does that work with a 57 plate Fiesta? They are going to give me money for a brand new car even though I bought it used?

mrshultz

Correct me if I'm wrong, I believe GAP insurance pays out to your invoice price, rather than the cost of one that's new. My understanding is that if your car ever gets written off/lost/stolen, you get a pay out price from your insurance company which will obviously be significantly less than what you paid in the first place, and the GAP insurance provides the difference between what you paid and your insurance company pay out.

Anyone else experience anything different?
Adam

banger9365

they will give you the money that you brought the fiesta for or
give you the money that pays the finance off
eg
you paid 6k for the car ,its worth 4k from your insurance ,Gap pay you 2k to make it up
or you owe 5k on loan for it and your insurance says it worth 4k ,gap pay you 1k
if you wright it off

BJV

Vehicle replacement and return to invoice are two very different forms of gap insurance.

Return to invoice protects the invoice price you paid. eg you paid £7000 so between your two insurance companies you are paid £7,000. Clear and finance if needs be and the rest is yours.

Vehicle replacement pays the difference between your vehicles valuation on the day it is written off and the amount that you would need to spend to buy another car the same age, mileage and condition as yours was on the day you first collected it from your dealership.

Explanations taken from http://easygap.co.uk/17/vri-gap-insurance/.

Which have done a review on gap insurance which explains it better than I can. http://www.which.co.uk/money/insurance/guides/gap-insurance/vehicle-replacement-gap-insurance-review/

Hope this helps.

Just check the terms and make sure that it covers things like warranties and that the price you have paid is not limited to a guide price.

xsupercarlx

thanks for your help guys.

BJV - you said " Just check the terms and make sure that it covers things like warranties and that the price you have paid is not limited to a guide price."

Are you saying I should make sure the GAP covers warranty? What do you mean by that.

And the price i paid being limited to a guide price, what do you mean by that?

Im sorry about this, Ill read the two links you gave also, thanks.



One more thing, does this mean that if your used car is written off, you're given enough to buy another used car that is the same as the one you had originally. Whats the difference between that and the RTI version?

InsideInsurance

banger9365 wrote: »

they will give you the money that you brought the fiesta for or
give you the money that pays the finance off
eg
you paid 6k for the car ,its worth 4k from your insurance ,Gap pay you 2k to make it up
or you owe 5k on loan for it and your insurance says it worth 4k ,gap pay you 1k
if you wright it off

That would be Return to Invoice with Financial Gap built in

BJV has the correct difference between RtI and VR both of which may or may not have financial gap also built in or not

xsupercarlx

Just did some reading, VR is only for cars upto 3 months old. Ill have to go for RTI which is fine for me.

InsideInsurance

It isnt only up to 3 months old but you must buy it within 3 months of buying the car.

That said, up to 5 years old is the oldest I know of any gap insurers at policy inception but if you dig around you may find another insurer that accepts older cars

BJV

Sorry some older forms of gap insurance where not exactly what they should of been.

For example you paid £7000 for your ford on the road.

The car was £6250.
Extended warranty £500.
Paint protection £250.00

Some old forms of gap would value your car against a guide price and then not cover the cost of the warranty or paint protection.

This means that if you needed to make a claim then instead of getting back the £7,000 that you paid you would only get £6000.

Guide price adjusted price of the car in this example £6000 and nothing extra for the warranty or paint protection. Leaving you with a £1000 shortfall which is not exactly perfect in anyone's book!

Ideally you want to find a policy that has the least exclusions possible. Every policy will have terms and conditions so please make sure that you read them.

xsupercarlx

I understand now, thanks.