Need to compare GAP Insurance for your new or used car that you have recently purchased?
It maybe that your dealer offered you GAP Insurance and now that you are surfing the web, you find there are three different types of GAP Insurance available and are now totally confused and need to compare GAP Insurances and how they work!!
It maybe that you have completed your research and have already decided on which type of GAP Insurance you need but are now shopping around for the best Gap Insurance at the best prices!
Comparing different types of GAP Insurance.
All Gap Insurance policies work with your fully comprehensive motor insurer in the event of your vehicle being declared a Total Loss (write-off). However, there are a number of different GAP Insurances available and they all work in a slightly different way covering a different ‘Gap’;
1) Finance & Contract Hire GAP Insurance
If your vehicle is declared a total loss, this will pay the difference (shortfall) between the Market Value at the time of the total loss and the outstanding finance settlement*. If the ‘Market Value’ paid by your fully comprehensive insurer is higher than the Outstanding Finance Settlement – then this policy will not pay anything as there is no ‘shortfall’. This policy will NOT recover any deposit that you may have paid as any payments will be made to the finance company.
2) Combined Return To Invoice Insurance
This is typically what most dealers offer to their customers and is suitable for those who have paid cash AND those that have arranged finance (including Contract Hire agreements providing you have a detailed copy of the original invoice).
If your vehicle is declared a total loss, this will pay the difference (shortfall) between the Market Value at the time of the total loss and the original invoice price*. If you are a cash buyer, you are paid the difference. If you are a finance customer, the policy will work in the same way, however any outstanding finance settlement must be settled first and the surplus that is left over is yours to keep as a deposit on your next car.
3- Combine Vehicle Replacement Insurance GAP
Again, this is suitable for those who have either paid cash and those who have arranged finance (excluding Contract Hire users).
If your vehicle is declared a total loss, this will pay the difference (shortfall) between the Market Value at the time of the total loss and the cost of a like for like replacement car – even if the cost of the replacement car is higher than the original invoice price you paid*. This is a popular choice of GAP Insurance for those who have negotiated a discount with the dealer and/or wish to protect themselves against future price increases. If you are a cash buyer, you are paid the difference. If you are a finance customer, the policy will work in the same way, however any outstanding finance settlement must be settled first and the surplus that is left over is yours to keep as a deposit on your next car.
For example – Let’s assume Mr Brown buys a new Audi and pays £26,000. He pays a deposit and finances the rest on a Hire Purchase agreement .
Sadly, his car is written off and at the time of the total loss, the ‘Market Value’ of his Audi has dropped to £10,400 and he still owes the finance company £12,000. Worse still, the cost of a new replacement Audi (same model and specification) has increased to £27,500.
- Finance GAP will pay the difference between the £10,400 Market Value and £12,000 settlement figure = £1,600*.
- Return To Invoice will pay the difference between the £10,400 Market Value and the original invoice price of £26,000 = £15,600. (Cash customers would keep the full £26,000 – finance customers would need to settle the finance at £12,000 still but would be left with a surplus of £14,000 to use as a deposit)*.
- Vehicle Replacement Insurance will pay the difference between the £10,400 Market Value and the cost of the new replacement car at £27,500 = £17,100. (Cash customers would keep the full cost of £27,500 – finance customers would need to settle the finance at £12,000 still but would be left with a surplus of £15,500 to use as a deposit)*.
* Subject to the maximum claim limit chosen and the policy Terms & Conditions.
Now that you know how these GAP Insurances work, don’t assume that all GAP Insurance policies offer the same features and level of cover. In fact, many policies have some exclusions and limitations that could potentially cost you £000′s in the event of a claim. At car2cover, we work hard with the Administrators/Insurers to offer the best GAP policies at the most competitive prices. Below is a list of features to look for.
Compare Gap Insurance
- Will the policy cover all factory fitted options and up to £1,500 of dealer fitted accessories, paint & upholstery treatments, insurance premiums and non transferable warranty charges,
- Will the purchase price you are protecting be capped or limited to a ‘Glass’s Guide’ value ?
- Will the GAP retailer offer a FREE 12 month deferred start option for new vehicles or motorcycles! – eg, buy 3 years gap and get 4 years cover !
- Does the GAP policy cover theft of vehicle with use of keys, a common form of theft now?
- All gap insurances end when a claim is made, but Car2Cover provide a new policy FREE for the remaining period !
- Does the GAP policy pay the finance settlement figure even if it exceeds the original vehicle purchase price ?
- Will the Gap policy cover up to £250 of your motor insurance policy excess ?
- Can the Gap policy be transferred, so no need to buy gap again if you change your vehicle?
- Does the Gap cover new and used cars, light vans, motorcycles and motorhomes?
- Will all named drivers on motor insurance policy be covered, including those on provisional licences?
- Are modified vehicles are covered by the Gap Insurer – a common exclusion in most policies?!
- How long does the Insurer settle the Gap claim? Is there a written commitment within terms and conditions?
- Can the Gap policy be transferred to next of kin upon death?
- Is Accident Management service included?
- Can you choose from various claim limits varying from £5,000, £10,000, £15,000, £20,000, £25,000, £50,000 and even unlimited?!
- Is there a unique No Claim Limit option to make buying gap insurance entirely customer risk free. – Only from car2cover !
- Car2Cover offer our ‘Full Term’ feature not offered anywhere else – even dealers!
Always remember, when comparing Gap Insurance always compare the policy Terms & Conditions even when it is the same underwriting insurer.
If you want to say ‘YES’ to all the above Gap Insurance features, then please visit us at www.car2cover.co.uk or call us today on 0843 2898 318 (monday to friday 9am to 5pm).
Gap Insurance Specialists with over 30 years experience.