GAP insurance, anyone...

  • Thread starter Thread starter Anonymous
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Are these really good?

£25 pcm seems so cheap. I worry that the GAP insurer will just put more pressure on main insurers to do repairs right to the edge of economical viability (maybe even over it if they subsidise the repairs!) which personally I'd not be happy with.

How do they make money when they offset such large amounts between a cars new replacement value and current value for so little!?


Either way, cheap isn't always best, so I'd guess BMW's is probably better if it's more expensive AND going on the fact their other insurances seem such good value!?

Dave
 
For a 20k+ car your looking at around £175 from an online broker for GAP insurance. Remeber theres a few different types of insurance.

RTI, Return to Invoice which pays out the difference from what you paid and the insurance payout in case of a total loss claim.

VRI, Replaces the vehicle for a brand new one in the case of a total loss claim

Finance GAP which will settle any finance left on the vehicle if its greater then the value fo the vehicle.

I went with car2cover on my Z4 and paid £120 for a 3 year RTI policy (max £10,000)

We had it on our old C2 VTS which was written of last year, it has come in handy. We paid £8900 for the car + £750 part ex, invoice was £12,250 before dealer discounts. After deductions for tax, dealer fees etc... We got around £11,500 from the insurance and GAP policy in total.
 
Mr Whippy said:
.Either way, cheap isn't always best, so I'd guess BMW's is probably better if it's more expensive AND going on the fact their other insurances seem such good value!?
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I'd say £25/mo was way too high, that's £300 a year...you can get three years for that.

BMWs policy is underwritten by Allianz Insurance; a big insurer, sure but so was AIG :) And the starting price is very high. I bought it on my M3 but not before they just about halved it. You can happily negotiate on price. Besides....AP cover should be cheap; even when a car is written off, there is not always a gap, and even then, there is a cap....so risk vs policies sold is pretty solid.

gannet said:
you pay 20k for a car, two years later it get stolen...
insurance says your car only worth 15k and gives you 15k...
gap insurance pays the remaining 5k to bridge the 'gap'....
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That's RTI rather than finance GAP. GAP pays the difference between what your insurance company pays out and what you owe on the finance. Return to Invoice (RTI) GAP Cover does the above plus covers the shortfall between that and what you paid
 
I paid one-off £900 to cover my E60 (purchase price was £25k) when it was bought 4 years ago. It covered 4 years from the date of purchase. It was the one used by my local dealer. The 35is is so expensive, it is really necessary to have shortfall insurance.
 
I was offered mine for £500 when it was bought at 6months old.. sort of regret it, but thankfully havent needed it anyway.
 
ksher said:
I paid one-off £900 to cover my E60 (purchase price was £25k) when it was bought 4 years ago. It covered 4 years from the date of purchase. It was the one used by my local dealer. The 35is is so expensive, it is really necessary to have shortfall insurance.
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But surely if the insurance pay out what the car is worth, you can replace the car for one like for like?

I suppose this is no good for those where the credit is against the car itself, which might now have gone to the scrapyard in the sky :(

I'm surprised most credit deals don't include this, as it's more about settling the credit against the car than anything else!?

Dave
 
Mr Whippy said:
ksher said:
I paid one-off £900 to cover my E60 (purchase price was £25k) when it was bought 4 years ago. It covered 4 years from the date of purchase. It was the one used by my local dealer. The 35is is so expensive, it is really necessary to have shortfall insurance.
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But surely if the insurance pay out what the car is worth, you can replace the car for one like for like?
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"Like for like" is the key. If the purchase price of the 35is is now £45k, the dealer will sell it for £25k in 3 years (after 36k miles). Insurance company will pay you no more than £25k if the car is fully written off. Then you can only buy a 3-year-old 35is. But shortfall insurance will pay out extra £20k (the difference), you can buy a brand new car again.
 
Gap insurance is outstanding value (if you need to claim). A colleague at work had an SLK for 18 months when he was in smash, the car was a right off and ended up with £11K less than he'd paid for it and about £4K less than a similar replacement. He went back to the Merc dealer to see what he could afford. The salesman who sold him the car originally asked him why he hadn't claimed on the gap insurance that he'd sold him - he said what gap insuarance, he'd forgotten he'd even had it. He got his original papers out - claimed the £11K whcih he got in 2 weeks, went back to the dealer and ended up with a newer car with less miles than he'd got originally. His insurance was about £400 for 3 years.
 
BMW dealers always sell the policy when you buy the car. Not sure about Over-The-Counter products.
 
The terms of mine were that I had to take it out in 90 days but you can transfer it in the first 6 months. This is udeful as you may have an issue with the car in which case you may have to change.

Most people think it looks too good to be true but the reason it is so cheap is that the statistics are in the insurers favour.

The thing to look out for though is the small print. In my last policy, there was a clause in that one which stated that there could be NO modifications. My insurance friend told me this meant that if the car just had a stubby, the claim could be thrown out.

My policy on the M does allow modifications.
 
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