Gap insurance - guide discussion

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  • mattk_180
    mattk_180 Posts: 375 Forumite
    Haven't read the whole thread but just in case somebody hasn't mentioned, if you want GAP cover, get it direct from an insurer or through an insurance broker.


    You don't have to have the car insurance with them and it's about a third of the price a dealer will try and sell it to you for.
  • dacouch
    dacouch Posts: 21,637
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    bluepen wrote: »
    We have recently purchased a car by PCP. It is the first time we have used PCP. Our car insurer pays out for a replacement new car in the first 12 months if our car is written off. From what I read, it seems that perhaps GAP insurance may be worth purchasing after this 12 month period, for the rest of the PCP contract, which is 41 months in total - so for the last 29 months of the contract? Does this make sense? The car dealer did try to sell us Gap insurance, but I told them we didn't want it.

    You can buy policies that have a post dated start date to coincide with your vehicle insurers new car replacement running out
  • Hi, I am currently considering buying gap insurance on a brand new car I have purchased. I see on the guide it says that gap insurance is worthwhile if buying under finance, but also that it is not necessary if you have fully comprehensive car insurance that offers a new car replacement.

    I am a little confused how to proceed as I have bought the car through a PCP deal, but my insurance also offers a new car replacement for the first year, I would be grateful for any advice you could give.
    Thanks!
  • TEC6245
    TEC6245 Posts: 16
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    Hi - about to get a new car on a 3 year personal lease. My insurance only mentions replacement at market value, not new for old - does anyone know if gap insurance is advisable in this instance. Would hate to owe a significant amount in the event of total loss or theft.
  • Quentin
    Quentin Posts: 40,405 Forumite
    Yes, that's what GAP insurance covers (The gap between market value and what you owe)


    Read through the guide to see what GAP cover will do.
  • mattk_180
    mattk_180 Posts: 375 Forumite
    Also check your policy wording carefully as aside from the usual "market value" wording, it may also note that they will pay out the original purchase price if written off within the first 12 months of it being registered.


    I bet a fare few people could have saved money by not taking it out in the first year when it wasn't required, although granted not all policies will cover this.
  • Have just been through the different links on the gap insurance information page. I decided on vehicle replacement gap insurance as it's a brand new car and the fully comp insurance I bought doesn't do replacement in the first year. On line the best offer for vehicle replacement across all the links MSE supplied was £144, but when I rang one company to advise on which policy would be better I was offered a total loss gap insurance with Aequitas Automotive Limited for £99. This pays out at whatever is the highest between 1) the finance if paying HP 2) the cost of replacing the car 3) a brand new car. Basically it's a hybrid between back to invoice and vehicle replacement.
  • I have to admit to being converted to the benefits of GAP Insurance after a family member recently recovered the balance between the market value of the car paid out via the insurer and the original price that she paid for the new car. It meant she could buy a new car instead of a second hand equivalent - as is the case for a lot of people, she wouldn't be confident enough to buy a second hand car. I'm also not sure how "market value" is calculated by the insurer - I don't think it's the price of buying an equivalent car through a dealer (with a warranty etc.), but I may be wrong or it may vary depending on the insurer.

    We just bought a second hand car from the dealer and because of the type of car it is (and it's price, age (6 years) and the fact it's second hand so should depreciate more slowly than a new car) we expect the depreciation to be around £4,000 over the next 3 years, if we look after it. The dealer's GAP insurance quote was £300 - really high! But the cover was up to £50,000 - something that would never be relevant to us.

    The quote from Click4Gap was £124 for 3 years cover and up to £5000. The policy wording appears clear and straightforward - largely their pay out appears to be linked to whether the primary car insurance pays out. Plus it covers someone robbing your car keys from your home.

    For us, we think the policy will become more important in its second and third year. If we needed to replace the car at that stage we probably wouldn't buy a second hand 8/ 9 year old car but something a bit younger - so we'd almost certainly have a shortfall to cover. Because of this we think the cheaper GAP insurance is probably worthwhile, just in case.

    As our car isn't new we don't get the benefit of the "new for old" in the first 12 months from our insurer - but the Click4Gap policy is only available to buy within 90 days of purchasing the car. So be warned!
  • csgohan4
    csgohan4 Posts: 10,587
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    got a 5 year gap cover for a new car, I think it's hand to have in case of accidents, especially if the car is on finance and you may get less than you paid for
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Sloanranger
    Sloanranger Posts: 38 Forumite
    edited 3 January 2017 at 1:58PM
    Hi, I bought a used car in 2014 from a dealership. They were going to finance the loan for it but because I was'n't the driver (I don't drive) they said they could'n't/ would'n't finance it so I obtained the finance through Black Horse bank. Recently while checking the policy I noticed insurance of £7 86 per month and when I contacted the bank they said it was gap insurance and that I should contact the dealer who said I signed for it. I was'n't aware that I had but my question is, if they were'n't financing the loan should I be paying this insurance
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