GAP insurance with car lease?

no1wf

I decided to get a car on lease and it's arriving tomorrow. I've got all insurance and everything sorted but I started thinking about GAP insurance. I feel like it's a good idea but when I go to get quotes they ask how much the car is worth, I've no idea since I'm not paying full price.

How can I get around that, or is it even worth it for me since I'm leasing and not buying?

Pilkington2000

The last couple of times I have bought a car the salesman has insisted on reading a paragraph trying to sell me GAP insurance. I decline their offer because I understand the car will depriciate in value.

I've never leased a car before, however I personally feel the product is even less relevant to you. In the event that your car gets written off, your insurance will make a settlement with the car finance company. Your problem will be if there is a shortfall between the insurance payout and the outstanding finance on the car - you would likely be liable for this. However, you will be paying a large deposit so this is likely to mean the car's value will always be more than the remaining finance. Personally I don't bother on a car bought with a loan, and even less likely to do it with a lease car

Enjoy your new car!

bigjl

If you are leasing then you are not buying the car.

The value you should give to GAP would be the retail price.

Any discount for the supply of the car is between the lease company and whoever they sourced it from, likely direct from the manufacturer.

You could always phone your lease company to find out what would happen in the event of the car being a total loss.

I would expect your insurance would simply buy a new car if it happened in the first year.

I do know somebody that had a car totalled when it was just over a year old and they ended up with a significant shortfall due to the car having done a hoggish mileage (25k miles in 12.5months)

WellKnownSid

If you read the small print - you will find that most insurance companies will only replace like for like in the first year if you're the keeper, which you won't be on leased vehicle.

Also, if the finance company needed to replace it, it would be full retail they ask for (it's not like they could just ask for another one at the same price as last time). So, if you write it off, you will be presented with a massive bill.

Purchase your Gap insurance online - just enter the full retail value of the car you're leasing. Get that from the manufacturer's website if necessary.

Mr_Mink

WellKnownSid wrote: »

If you read the small print - you will find that most insurance companies will only replace like for like in the first year if you're the keeper, which you won't be on leased vehicle.

Also, if the finance company needed to replace it, it would be full retail they ask for (it's not like they could just ask for another one at the same price as last time). So, if you write it off, you will be presented with a massive bill.

Purchase your Gap insurance online - just enter the full retail value of the car you're leasing. Get that from the manufacturer's website if necessary.

Surely the OP would be the keeper, they wouldn't be the owner.

Double_V

You have 6 months to buy GAP.
Some companies do older cars as well.

There are quiet good ones out there.
Refrain from smaller and unknown cheaper companies. What if they go bust.
Anyway you shouldn't get a quotes above £120 - £220 for 3 years.

Mercdriver

Mr_Mink wrote: »

Surely the OP would be the keeper, they wouldn't be the owner.

In the case of many leases, and this can be seen in the many cases of NIP not being received within 14 days, the person leasing the car is neither owner nor registered keeper. They are recognised as the ordinary keeper of the vehicle for the purposes of S172, but aren't the registered keeper as their details aren't the ones registered with the DVLA and on the V5

no1wf

That's a good point actually, I've not received a V5 yet maybe it's in the post? I've put on my insurance that I'm the registered keeper but not the owner.

But regarding the gap insurance, over 2 years I'll have paid not even 3k for the car. So even if I had an accident with 12 months left to go I'd still only owe not even 1.k which I'd have thought my regular insurance would cover.

flashg67

But you won't just owe £1k - you have agreed to return the car at the end of the contract in good condition also.

So if it's written off, you / the insurance need to replace the car, not just what you owe the lease company.

no1wf

flashg67 wrote: »

But you won't just owe £1k - you have agreed to return the car at the end of the contract in good condition also.

So if it's written off, you / the insurance need to replace the car, not just what you owe the lease company.

Oh yeah.. I'm getting too confused by this now o.O

I remember configuring a car on the peugeot website (out of interest, I didn't get it from there) and I remember seeing the total to be about £12k.

Is gap insurance a good idea then? A one off low payment for that extra security considering it's an expensive car

jimjames

no1wf wrote: »

Is gap insurance a good idea then? A one off low payment for that extra security considering it's an expensive car

I can't see the point myself.

You buy a car with gap insurance for 3 years to cover the (hopefully) remote possibility that you have an accident AND your car is written off AND the payout is less than you owe. An expensive car is even less likely to be written off as well.

Yet at 3 years and 1 day you want to buy a new car you have to find the money to cover depreciation yourself. Why not just use the Gap premium towards that rather than taking out a policy? Not sure if a lease is any different but if you don't own the car isn't it something that is no longer your problem?

Maybe someone can explain it but it doesn't make sense to me. There seems to be a proliferation of insurance policies to cover every eventuality. Personally I prefer to self insure where appropriate which has done me well up to now.