Gap Insurance

LouiseAH
LouiseAH Forumite Posts: 58
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Hi, Looking to purchase a new car on PCP Finance to get a better deal and pay the car off after 6 weeks. The dealership have offered me free 4 year Gap Insurance. The car is 20K, how much roughly would I have paid for 4 years Gap Insurance if they hadnt included it for free.

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  • Bigwheels1111
    Bigwheels1111 Forumite Posts: 1,820
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    Why six weeks.
    On the day you get the car pay it off, no fees or interest.
    14 cooling off period or such like.

  • LouiseAH
    LouiseAH Forumite Posts: 58
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    It will be 3-6 weeks depending on the delivery time of the new car and when a current investment matures. My question was about cost of the Gap Insurance.
  • boobyd
    boobyd Forumite Posts: 234
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    LouiseAH said:
    Hi, Looking to purchase a new car on PCP Finance to get a better deal and pay the car off after 6 weeks. The dealership have offered me free 4 year Gap Insurance. The car is 20K, how much roughly would I have paid for 4 years Gap Insurance if they hadnt included it for free.
    Depends on what the Gap Assurance provided is there are mainly 4/5 different types/cover
  • prettyandfluffy
    prettyandfluffy Forumite Posts: 158
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    Google "gap insurance" and get a couple of quotes.
  • Bigwheels1111
    Bigwheels1111 Forumite Posts: 1,820
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    LouiseAH said:
    It will be 3-6 weeks depending on the delivery time of the new car and when a current investment matures. My question was about cost of the Gap Insurance.

    I know, but as you are not paying for Gap, but will be paying interest and fees.
    I though that was more important.
  • daveyjp
    daveyjp Forumite Posts: 12,059
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    edited 3 September at 5:20PM
    And if the free GAP is a finance GAP product it will be of little use if you are paying off the finance shortly after buying the vehicle.
  • DullGreyGuy
    DullGreyGuy Forumite Posts: 6,175
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    LouiseAH said:
    The car is 20K, how much roughly would I have paid for 4 years Gap Insurance if they hadnt included it for free.
    Like car insurance (Third Party Only, Third Party, Fire & Theft, Comprehensive) there are three main versions of GAP insurance:

    Financial/Traditional - pays the shortfall between the insurance settlement and the outstanding finance

    Return to Invoice - pays the shortfall between the insurance settlement and what you originally paid for the car

    Replacement Vehicle - pays the shortfall between the insurance settlement and what you'd need to pay today for the same original car (ie protects against inflation)

    The policies can also be layered so can be RTI and Financial and will payout whichever is the higher of the two.


    How much the policy is worth will depend on which type it is and the quality of the cover. Similarly how much value it has to you once the finance is cleared will also depend on the type... financial GAP becomes irrelevant if you have no finance. 
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