GAP Insurance

Seagull1989 · Jan 21, 2014

Hello

Buying a new car this week and the garage want £399 for Gap insurance. Ive seen it online for around £200 but wondered if these sites are genuine. Has anyone used any online before. Any reccomendations?

Thanks

Shirty · Jan 21, 2014

I used these chaps when I bought a car in May last year: http://www.ala.co.uk/?gclid=CMXF_fq0j7wCFW_MtAodG2MALA

They were recommended by Which and Autotrader, and their quote was about a 3rd of the price of the main dealer option. You can get a quote and buy online which is all nice and straightforward. Fortunately I haven't had to use the insurance (yet !) so cant vouch for their claims handling.

danielson81 · Jan 21, 2014

Ditto above. Vauxhall dealership wanted £400 odd too.

Got it for £94 for 3 years in 2010, with Click4Gap and got £30 back from Quidco (now its £22.50) , effectively it cost me £64, or £21.33 a year!

Luckily never had to use it!

browneggsandham · Jan 22, 2014

Thanks for posting that link - prices seem very reasonable. Never took this out when I purchased my car almost 2 years ago as dealer quoted price was prohibative. Kind of wish I'd shopped around at the time as it's too late now...just hope I won't need it!

desprateseagull · Jan 22, 2014

have a look on the moneysavingexpert.com site, for any latest offers..

and ALWAYS checkout a cashback site (quidco, topcashback etc - or some bank cards), to get a few quid back on selected insurers..

(CLEAR YOUE COOKIES first, for clean purchase tracking by the c/b site!)

Seagull1989 · Jan 23, 2014

Thanks I've found prices through those sites for about £130.00, I just hope if I do end up needing to use the Gap Insurance its genuine.

Arthritic Toe · Jan 23, 2014

Why are you talking about gap insurance like its a good idea? It's a big waste of money. It is very profitable for the insurance companies and there is a big commission for the sales guys. Guess who is funding that? Gap insurance is a sort of insurance against depreciation in the event of writing off the car. It will pay the difference between the insurance companies valuation at the time of the write off and your purchase price. The premium of several hundreds of pounds for this is HUGE, given the statistical likelihood of this event occurring. Please - do not be ripped off, just decline it.

There's a really easy rule in life - anything involving a hard sell is profitable for the organisation selling it and bad for you.

browneggsandham · Jan 23, 2014

Whilst a lot of what you say is very true, I do think that it comes down to an individual person.

I didn't take it out on my car, but I do know that if I was to write it off and there was a shortfall on the market value against what I still owe in finance I probably couldn't afford to pay it off AND find money for a new car.

So I would have to make do without. Putting it like that, is £130 really that much for peace of mind?

Seagull1989 · Jan 23, 2014

Arthritic Toe said:
Why are you talking about gap insurance like its a good idea? It's a big waste of money. It is very profitable for the insurance companies and there is a big commission for the sales guys. Guess who is funding that? Gap insurance is a sort of insurance against depreciation in the event of writing off the car. It will pay the difference between the insurance companies valuation at the time of the write off and your purchase price. The premium of several hundreds of pounds for this is HUGE, given the statistical likelihood of this event occurring. Please - do not be ripped off, just decline it.

There's a really easy rule in life - anything involving a hard sell is profitable for the organisation selling it and bad for you.

Several hundred pounds ? Its £130 which is nothing if I do end up writing my car off which could end up leaving me a 5 or 6k shortfall.

As with ANY insurance it's better to have it and not need it! Than need it and not have it! And no the salesman didn't say that to me!

Clive Walker · Jan 23, 2014

Agree agree agree. Recently used easy gap which cost me around £100 but gave me peace of mind and never the need to worry should the worst happen. If I wrote my car off last week I would still have owed the finance for the remaining 30 months plus the remaining value of the car. I also wouldn't be able to afford a new car.

drew · Jan 23, 2014

Arthritic Toe said:
Why are you talking about gap insurance like its a good idea? It's a big waste of money. It is very profitable for the insurance companies and there is a big commission for the sales guys. Guess who is funding that? Gap insurance is a sort of insurance against depreciation in the event of writing off the car. It will pay the difference between the insurance companies valuation at the time of the write off and your purchase price. The premium of several hundreds of pounds for this is HUGE, given the statistical likelihood of this event occurring. Please - do not be ripped off, just decline it.

There's a really easy rule in life - anything involving a hard sell is profitable for the organisation selling it and bad for you.

It's not covering the difference between purchase price and market value but the shortfall between market value and finance owing. Having said that, a lot depends on the car you're buying. If it is a Ford Ka I'd say don't bother but if you are buying a luxury car then it could be worth the money. Each to their own.

studio150 · Jan 23, 2014

drew said:
It's not covering the difference between purchase price and market value but the shortfall between market value and finance owing. Having said that, a lot depends on the car you're buying. If it is a Ford Ka I'd say don't bother but if you are buying a luxury car then it could be worth the money. Each to their own.

There are in fact several variations on GAP insurance, and clearly there is a need to consider fully what option you are in fact buying. The common options are:
1. The outstanding finance amount - The finance amount will probably reduce in a straight line (equal amounts each month) whereas the depreciation on the car will be more in the first year. - Depending on your insurance for the usual motor cover, you will probably be entitled to a new vehicle if the vehicle is written off in the first year, therefore gap insurance is irrelevant in this period.
2. As 1 but the gap cover starts after year 1 to take into account the new vehicle option under the standard insurance
3. Back to purchase price, where the gap cover provides for the difference between the value offered by your insurer against the price brought for. - Again in later years this will be worth less to you due to inflation
4. New car cost - Which provides for the cost between the write off value and the cost of buying a new car (same model, etc) today.

The cost of these options differ depending on the likely amount the the gap insurer will need to pay out on.

From a personal perspective I have yet to write a car off and see gap insurance as something that I can do without, but everyone is different.

Cappers · Jan 23, 2014

Be careful about who wants to sell to to you, and ensure they know what they are telling you. Even they don't know really. I paid cash for a car from a dealer and they tried to sell me GAP insurance telling me how beneficial it was
WTF?

Noldi · Jan 23, 2014

Also if you lease a car you sometimes require gap ins, read your contract some require you to repay full price if car is written off in the first year.

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