WHAT IS GAP INSURANCE?
Guaranteed Asset Protection insurance, commonly known as GAP insurance, is designed to work alongside your comprehensive motor policy. If your vehicle is involved in an incident which sees it written off, GAP insurance will cover the difference in value between the original purchase price and the depreciated value at the time of the incident.
DO I NEED GAP INSURANCE?
It’s a well known fact that vehicles depreciate in value the moment they are driven off the forecourt. If you are involved in an accident or if your vehicle is stolen you would need to make a claim on your main insurance policy. If the vehicle is written off, the insurer will pay the market value of the vehicle at the time of the incident. If it’s 4 years since you purchased the vehicle, this could mean receiving around 45-55% of the original purchase price. If you originally purchased the vehicle on a finance agreement you could end up in the tricky situation of owing more than the vehicle is worth. GAP insurance will cover the difference in value betwee nthe original purchase price and the depreciated value at the time of the incident.
The table below illustrates this example:
|WITHOUT GAP||WITH GAP|
|Purchase price of Vehicle||£12,000||£12,000|
|Written off by the insurer who agrees to pay||£6,000||£6,000|
|Minus the excess||£250||£250|
|Car insurance payout||£5,750||£5,750|
|GAP policy pays the shortfall||-||£6,250|
GAP insurance will cover the difference between the motor insurance settlement and either the GAP insurance will cover the difference between the motor insurance settlement and either the invoice price of the vehicle or the early finance settlement figure, giving you peace of mind that should your vehicle be written off you won’t be left out of pocket.
IS GAP INSURANCE SUITABLE FOR ME?
We offer different products to suit individual needs.
This is suitable if you have purchased your vehicle within the last 365 days from a VAT registered Motor Trade rand paid in full through cash, cheque, BACS transfer, loan, bankers draft or through a finance agreement. Options are available with cover periods of up to 4 years for cars, vans, and motor homes, up to a maximum value of £125k, and up to 3 years for taxis with a maximum value of £70k.
CONTRACT HIRE GAP
This is suitable if you are leasing a car or van with no option to purchase the vehicle. The vehicle must have been obtained within the last 365 days. Options are available with cover periods of up to 5 years for cars and vans up to a monthly rental value of £1,000. This product will cover the difference between the motor insurance settlement figure and the early finance settlement figure.