Cancelling GAP insurance?

gazfocus

I bought a car last week - signed the finance paperwork on Tuesday and collected the car on Saturday. Having got caught up in the excitement of getting my new (11 month old) car, I agreed to the dealers GAP insurance at £350. This has been paid for under the finance agreement.

I am just wondering, is it possible to cancel the GAP insurance policy without going through all the hassle of new finance documents, etc? The reason I'm asking is because the dealer we bought the car from is about 20 miles away so a bit of a trek.

BJV

Yes you can cancel. Most gap insurance policies offer 30 days cooling off but even the more basic more offer a minimum of 14 days.

During this time providing that you have not attempted to make a claim you can cancel and get a full refund.

BJV

Sorry missed the last bit, you do not have to go back to the dealer simply call the gap insurance supplier and cancel. It will mean that you may still end up paying interest on the gap so that said it might be worth calling the finance company too.

CB1878

£350 is too much, and if they have added it to the finance then you will be paying interest on it too. If you cancel and still want cover then there are plenty of independent providers who can give you much cheaper cover

Suzykd

How does the refund work if you've already paid for the car?
Presumably it gets refunded directly back to you?
I'm just about to buy a car and have discovered I am being overcharged for the GAP, but I'm paying by credit card for the car.
Should I cancel the GAP now, or wait, on the basis that I might have an accident driving home?
I paid the deposit on the car yesterday, and am due to collect it next Tuesday.

gazfocus

So by default, if I cancel the GAP policy, will the refund go to the finance company or will it be refunded to me direct? Thanks again

forgotmyname

There is nothing to refund, You have not paid it yet.

It should get wiped off the loan figure.

gazfocus

forgotmyname wrote: »

There is nothing to refund, You have not paid it yet.

It should get wiped off the loan figure.

I agree that I haven't paid yet but the finance company have paid out the loan so part of that will be for the GAP cover. My obvious preference would be for it to come off the finance but I've read elsewhere that the dealer may send out a cheque and therefore I'll still be paying interest on the amount.

CB1878

Do everything you can to get the Gap knocked off the amount financed. If they send you a cheque then you will be paying interest on the £350 for the entire term, as it is still part of the amount you borrow.

If the dealer drags their heels, contact the finance company direct and they should sort it for you. Just to make sure there is a 'trail' I would put it in writing (dated) to be certain, do not want to give the dealer the chance to get outside the 'cooling off' period do you?