GAP cover payment to finance company

Dobbibill

Hi All - hoping for a bit of advice please.

My DS has taken out HP on a vehicle over 30 months.
The finance company have done a follow up call today about him taking GAP cover for a one off payment of £199.

My questions are -

What is this all about?
My understanding is that it will cover the difference between the insurance pay out and amount owed on HP should the worst happen that the car is stolen/written off. Am I right?

Is it worth it?

Is there anything specific we should be checking with them before taking it out? eg - different types of cover.

I've never come across this myself with my previous car purchases so unsure of the right choice.

At face value it seems like good value for money - Any thoughts?

TadleyBaggie

Dobbibill wrote: »

My understanding is that it will cover the difference between the insurance pay out and amount owed on HP should the worst happen that the car is stolen/written off. Am I right?

That is one type of GAP insurance, another is one that pays out difference between what the main insurance pays out and what was originally paid for the vehicle.

I had it on a vehicle that I had bought for £17K a few years ago that was written off, the insurance paid out £13.5K (there was no finance to pay off at this point), the GAP insurance then paid out another £3.5K. The only problem I had was that the GAP insurance company insisted that the main insurance company had paid out too little, i.e. they were being asked to payout too much. After a couple of weeks the two insurance companies agreed the payouts and I got the full £17K.

Dobbibill

Thanks TadleyBaggie - so the first question needs to be what type of cover they are offering. The amount left on the HP or the total cost of car at time of purchase.

Either way it would seem good value for money at just under £200

BrassicWoman

I would always buy gap insurance. Always.

TadleyBaggie

You should read this MSE guide to GAP insurance: http://www.moneysavingexpert.com/car-insurance/gap-insurance

daveyjp

TadleyBaggie wrote: »

That is one type of GAP insurance, another is one that pays out difference between what the main insurance pays out and what was originally paid for the vehicle.

I had it on a vehicle that I had bought for £17K a few years ago that was written off, the insurance paid out £13.5K (there was no finance to pay off at this point), the GAP insurance then paid out another £3.5K. The only problem I had was that the GAP insurance company insisted that the main insurance company had paid out too little, i.e. they were being asked to payout too much. After a couple of weeks the two insurance companies agreed the payouts and I got the full £17K.

Seems a common trick amongst GAP and insurance company to dispute claim amounts. Took a friend of mine 6 months to sort out a similar situation, an argument over £500 which left him far more than that out of pocket.

Dobbibill

TadleyBaggie wrote: »

You should read this MSE guide to GAP insurance: http://www.moneysavingexpert.com/car-insurance/gap-insurance

Excellent link, I've now got more information.
I didn't even consider looking on the main site for information....I'm such a doughnut.

Thanks everyone for your advice. I really appreciate it.