PCP car purchase

Palken

Hi

In the process of buying a new car using PCP and getting a lot of pressure from the sale personnel to buy GAP insurance. Can anyone clarify what would happen if this car is written off say one week after driving off the forecourt? I understand that the car would have depreciated considerably but my understanding is that my insurance company would pay the market value i.e. sufficient to buy a one-week-old vehicle that is the equivalent of the one that was written off.

If I am right can I simply continue to pay the PCP monthly payments and at the end of the term be able to buy the vehicle at ballon price or hand the vehicle back as per the original agreement?

neilmcl

Don't get GAP offered by the dealership, it's will be so much cheaper if you get it yourself from one of the many providers out there, possibly between £100 and £200 depending on the value of your car.

Your insurer will most probably have a new for old policy for a new car purchase if stolen or written off during the first 12 months but after this GAP is essential to cover the inevitable shortfall between an insurance payout and your finance settlement.

DrEskimo

Insurance companies definition of market value usually means bottom trade valuation...there will be considerably difference between Thier valuation and what you paid (and more importantly what you will still owe...).

Check your insurance policy for new for old replacement and be very sure what it will and won't cover, as well as clauses.

I am skeptical of most non-mandatory insurance, but I think GAP at the right price is worth it. More so if you require finance and would struggle with the shortfall.
I used TotalLossGap for a used car I bought without finance as the 5yr policy was only £250 for mine, and the terms of the cover were better than most I have seen. It provides finance, return to invoice and vehicle replacement under one policy, and has no financial or mileage limits.

At £50 a year it saves me having the trouble of haggling a fair price with my insurance company, as well as any depreciation.

https://totallossgap.co.uk

Having said all that, I imagine the lifetime incidence of writing off a car is pretty low, so you need to weight up the risk against the potential cost....

wgl2014

Palken wrote: »

Hi

If I am right can I simply continue to pay the PCP monthly payments and at the end of the term be able to buy the vehicle at ballon price or hand the vehicle back as per the original agreement?

Unlikely, the finance is against the written off car not another similar one. The insurance company pays the lender and you pick up the shortfall which could feasibly be a few grand even in a few weeks.

For the sake of a couple of hundred quid it's a no brained for me.....

iolanthe07

Gap insurance is a good idea, but buy it independently of the dealership. You will get a much better price. Dealers rely on add-ons like Gap Insurance to keep the sticker price of a car low.

motorguy

Palken wrote: »

Hi

In the process of buying a new car using PCP and getting a lot of pressure from the sale personnel to buy GAP insurance. Can anyone clarify what would happen if this car is written off say one week after driving off the forecourt? I understand that the car would have depreciated considerably but my understanding is that my insurance company would pay the market value i.e. sufficient to buy a one-week-old vehicle that is the equivalent of the one that was written off.

If I am right can I simply continue to pay the PCP monthly payments and at the end of the term be able to buy the vehicle at ballon price or hand the vehicle back as per the original agreement?

If you're linking those two, then no. The finance is on that particular car so if its written off the finance company will be looking full payment.

Get GAP insurance - i personally think its a MUST - but dont get it via the dealer.

Robby1988

I would buy absolutely nothing from the dealer except the car.

There are many providers of GAP insurance online, shop around and you'll save a bomb. Some years ago when I was shopping for GAP I saved over £200 on the dealers quote. Dealers get away with rip off charges for GAP because they can flog it as "just another few quid a month" on top of your monthly payments for the car.

For the sake of a hundred quid or so, its defiantly worth it as with any car finance you normally owe thousands more than the cars actually worth at 'trade in value', for the majority of your term.