Gap Insurance

Patmanuk

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Hi

Just bought a new Fiat Grand Punto on finance, 0% over 3 years. We were offered GAP insurance for £300, didnt take it and glad we didn't having looked at prices on the net.

My question is though, if in a couple of months the car is written off does the finance all have to be paid back in one lump sum instead of over the three years? The money received from my insurance company would therefore all have to go on this instead of buying a new car? Is this correct or not?

Many thanks

Patrick

Iamthesmartestmanalive

Patmanuk wrote: »

Hi

Just bought a new Fiat Grand Punto on finance, 0% over 3 years. We were offered GAP insurance for £300, didnt take it and glad we didn't having looked at prices on the net.

My question is though, if in a couple of months the car is written off does the finance all have to be paid back in one lump sum instead of over the three years? The money received from my insurance company would therefore all have to go on this instead of buying a new car? Is this correct or not?

Many thanks

Patrick

You will find that most insurance companies if not all will replace it with a brand new car if it is written off in the first year (or 6 months for some insurers)

As for after that you will find they will pay out at market value and you will have to arrange to pay the extra off.

Although its a 0% deal there may still be a bit of a difference, however I would suggest you would be better crossing that if it happened as its unlikely too

LandyAndy

Gap insurance is so called because it refers to the space between the ears of the purchaser.

AdrianHi

LandyAndy wrote: »

Gap insurance is so called because it refers to the space between the ears of the purchaser.

That's quite funny, and a bit close to the truth for comfort.
As said regular insurance will pay up original invoice value of the car if written off in the first 12 months. You don't need GAP cover for that period though you have to pay for the insurance at time of purchase of the car. Most GAP insurance is a shortfall insurance for the negative equity between outstanding finance and market value of the car. It's amazing how often a car salesman will mis-sell GAP - shortfall insurance to someone who can never benefit from the policy because they have paid a big deposit or paid cash for the car.
The shortfall form of this insurance is bad value for money in my opinion even if you can benefit from it. Your much better off with RTI (return to invoice) sometimes also referred to as a form of GAP insurance which will pay back original invoice value of the car is written off in the period, usually 36 months. That I think is worthwhile if the premium is reasonable.

moonrakerz

AdrianHi wrote: »

As said regular insurance will sometimes pay up original invoice value of the car if written off in the first 12 months.

(My addition)

Depends on the policy !

lil_me

If you want to get gap insurance definately buy seperately, it's amazing how much these dealers are making on the sale of the gap insurance. I would always go for one which pays out the price paid for the car.

gilbert_and_sullivan

Or try getting a quote from NFU for your car insurance.

They will replace your new car up to 2 years old with an identical new one if its written off/stolen etc. No extra charge, its part of the comp polcy.