GAP Insurance

jack_tyler

Advice needed please:-


I have just bought my son a car which he will collect shortly after the 1st Sept. The car is a new one but because of his age, the finance has to be in my name, and then my son will be setting up a direct debit to pay me the money every month.


What I would like advice on is, the dealership has recommended GAP insurance. If I have understood it correctly, if anything happens to the car, i.e. it gets written off or stolen, it pays the difference between what the insurance company says the car is worth (at the time) and what I have paid. Also apparently there are different types of GAP insurance, back to invoice, replacement car and another one I cant think of right now. The thing is I really dont know what to do for the best. So please can anyone advise what they would do. Do I buy the GAP insurance or not? and if so, which one do I choose.



Thank you

EssexExile

The first thing to check is whether his insurance already covers this, mine does for the first year.

jack_tyler

EssexExile wrote: »

The first thing to check is whether his insurance already covers this, mine does for the first year.

Thanks il do that, as soon as I get a reg from the dealership and get the insurance set up. But if they do cover for the 1st year is it worth doing the GAP insurance after that

Car_54

When (or if) you decide to buy gap insurance, shop around. You’ll probably get it for £hundreds less than the dealer quotes.

EssexExile

jack_tyler wrote: »

Thanks il do that, as soon as I get a reg from the dealership and get the insurance set up. But if they do cover for the 1st year is it worth doing the GAP insurance after that

That's entirely up to you! I wouldn't but others would.

Scrapit

For the price of gap insurance I can't believe everyone doesn't have it. But use Martin's pages to compare prices, the ones he recommend are far too dear.

lopsyfa

As someone who has just claimed on a gap insurance when a lorry went into the back of my car on the motorway, it will be madness not to buy GAP insurance for a new/nearly new car. No matter how careful you or your son is, the car can be written off by mistakes of a third party driver.

However, you don’t have to buy the GAP insurance from the dealership as it will be inflated. I bought mine from ALA (https://www.ala.co.uk) underwritten by AMS insurance services limited and the claim process has been painless so far.

Even though your insurance may provide new for old, you have to buy the gap within 60 or 90 days after purchasing the car (other companies may allow longer) but you can usually defer the policy to start after first year if your insurance covers the first year.

Get vehicle replacement or return to invoice GAP not just one to cover the finance shortfall.

Supersonos

I don't get GAP insurance. Am I right that if I buy a car for £20k which, for argument's sake, is worth £10k two years later and I write it off, my insurance pays me the £10k the car is worth and the GAP insurance pays me the £10k it has depreciated, meaning I can go and get a brand new replacement?

DrEskimo

Supersonos wrote: »

I don't get GAP insurance. Am I right that if I buy a car for £20k which, for argument's sake, is worth £10k two years later and I write it off, my insurance pays me the £10k the car is worth and the GAP insurance pays me the £10k it has depreciated, meaning I can go and get a brand new replacement?

Correct. What swayed me was that it's quite common that your insurance company will only likely offer you about £8k, meaning you still have a shortfall to cover even just to replace your car like-for-like...! GAP insurance will also deal with the valuation negotiations for you (so they can minimise their losses), so it has a couple of other perks, as well as covering the cost of depreciation.

If you get vehicle replacement cover, then you can get even more than what you originally paid if the price of the car has increased in those two years. This is quite typical if the model has been updated in the two years since you bought it, or if discounts are no longer as strong.

The fact that insurance companies rarely actually pay out a figure that enables you to buy a like for like replacement of your car before the accident, I decided it was worth the small additional cost.

I got 5yr cover on my used car from TotalLossGap for £248. At less than £50 per year, it wasn't a sum of money I was going to miss too much given the potential value of it should I be unfortunate enough to suffer a write-off.

Of course, the chances of experiencing a total loss is quite small if you look at the lifetime incidence rate..

DrEskimo

jack_tyler wrote: »

Advice needed please:-


I have just bought my son a car which he will collect shortly after the 1st Sept. The car is a new one but because of his age, the finance has to be in my name, and then my son will be setting up a direct debit to pay me the money every month.


What I would like advice on is, the dealership has recommended GAP insurance. If I have understood it correctly, if anything happens to the car, i.e. it gets written off or stolen, it pays the difference between what the insurance company says the car is worth (at the time) and what I have paid. Also apparently there are different types of GAP insurance, back to invoice, replacement car and another one I cant think of right now. The thing is I really dont know what to do for the best. So please can anyone advise what they would do. Do I buy the GAP insurance or not? and if so, which one do I choose.



Thank you

I found TotalGapLoss to provide one of the cheapest premiums with a simple single policy that is comprehensive. It combines finance, return to invoice and vehicle replacement all in one, so you will always get the highest amount of any of those three (this will typically be vehicle replacement). It also has no mileage limitations, and no limit on the shortfall it covers (other providers will ask you how much GAP cover you want to be covered for).

They also were the only provider to provide vehicle replacement cover on a used car for up to 5yrs.

JP1978

As above advice, shop around, plenty of GAP insurance companies, I also have a policy with Total Gap (along with alloy/tyre and paint/dent cover) - the combined cost of these three was a similar cost to the dealer cost for GAP only.

Dealer GAP is just another way for them to make a huge markup but you can buy it from anywhere, as long as its done within a certain timescale of picking up the car.