After researching on here and on google and coming up with some information but not a lot, I decided to put a guide up for people on here.
Apologies if some of the information is not 100% applicable to you as this guide was written based upon the purchase of my AUC z4c rather than a brand new car.
So when you have purchased a New or Used car from a dealer and have just spent a lot of money, the last thing you want to do is experience a write off and significant loss in your first few years of ownership.
GAP insurance is an ADDITIONAL insurance cost on top of your regular annual insurance. Its purpose is to make up the difference in shortfall between the cost of your vehicle when you purchased it and the payout by your insurance company upon its write off.
There are several forms of GAP Insurance available on the market but they brake down into the following main 3 policies:
1. Finance Gap - This covers the difference between the market value paid out by your insurance company and any residual finance balance that this sum fails to repay.
2. Return to Invoice Gap - This pays the difference between the depreciated value payout by your insurance company, and the original price paid for the vehicle on your invoice from the dealer.
3. Vehicle Replacement Gap - This pays the difference you might have to pay to get a replacement in the real world.
Always Always ALWAYS read the policy documents thoroughly, ensure the company you are buying from is FSA backed and research the underwriter thoroughly!
- Try and buy GAP insurance within 21 days of your vehicle purchase but DO NOT be bullied into buying from the dealer. While they may offer a good service it is at a very very very bloated cost (ie £330 for 3 years cover). Bare in mind BMW are making a lot out of this, the price is NEGOTIABLE so if you want to buy it, barter! I knocked them down to £255 for 4 years and still didnt buy from them!
- Some companies will offer you transference of the policy to another owner if you sell the car before a claim is required.
- Some companies cover certain countries only, check the policy document thoroughly.
- Excess should be covered (the amount you have to pay your regular insurance) but varies per policy and can vary after year 1 / 2.
- Some companies stipulate they will not provide vehicle replacement cover in the first year if your actual provider provides this (usually for new cars).
- The cover should state how many years you can use it for. A claim limit (the maximum payout differential between your normal insurance payout and how much the GAP will payout)
- Vehicles with a purchase cost of over £75k are often not covered, check the policy documentation thoroughly to confirm.
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I'm going to talk a little more about my RTI (return to invoice) Gap here:
Eventually I went for directgap.co.uk
5 years cover for £195 : Return to Invoice+ Policy with a claim limit of £10,000
I chose Direct Gap as they were the only people to offer 5 years cover and they had the best policy document of all I checked. (Transfer of cover, £250 excess cover, European cover in stipulated countries)
I would recommend staying away from click4gap as they state in their document they will only cover up to the market value of the vehicle at purchase date and also will amend your valuation from the purchase price if you buy the GAP after 21 days of vehicle purchase.
Sites to check are:
Directgap
Car2cover
Confused.com
AA
all other insurers
ala.co.uk
I hope this guide helps someone!
Apologies if some of the information is not 100% applicable to you as this guide was written based upon the purchase of my AUC z4c rather than a brand new car.
So when you have purchased a New or Used car from a dealer and have just spent a lot of money, the last thing you want to do is experience a write off and significant loss in your first few years of ownership.
GAP insurance is an ADDITIONAL insurance cost on top of your regular annual insurance. Its purpose is to make up the difference in shortfall between the cost of your vehicle when you purchased it and the payout by your insurance company upon its write off.
There are several forms of GAP Insurance available on the market but they brake down into the following main 3 policies:
1. Finance Gap - This covers the difference between the market value paid out by your insurance company and any residual finance balance that this sum fails to repay.
2. Return to Invoice Gap - This pays the difference between the depreciated value payout by your insurance company, and the original price paid for the vehicle on your invoice from the dealer.
3. Vehicle Replacement Gap - This pays the difference you might have to pay to get a replacement in the real world.
Always Always ALWAYS read the policy documents thoroughly, ensure the company you are buying from is FSA backed and research the underwriter thoroughly!
- Try and buy GAP insurance within 21 days of your vehicle purchase but DO NOT be bullied into buying from the dealer. While they may offer a good service it is at a very very very bloated cost (ie £330 for 3 years cover). Bare in mind BMW are making a lot out of this, the price is NEGOTIABLE so if you want to buy it, barter! I knocked them down to £255 for 4 years and still didnt buy from them!
- Some companies will offer you transference of the policy to another owner if you sell the car before a claim is required.
- Some companies cover certain countries only, check the policy document thoroughly.
- Excess should be covered (the amount you have to pay your regular insurance) but varies per policy and can vary after year 1 / 2.
- Some companies stipulate they will not provide vehicle replacement cover in the first year if your actual provider provides this (usually for new cars).
- The cover should state how many years you can use it for. A claim limit (the maximum payout differential between your normal insurance payout and how much the GAP will payout)
- Vehicles with a purchase cost of over £75k are often not covered, check the policy documentation thoroughly to confirm.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
I'm going to talk a little more about my RTI (return to invoice) Gap here:
Eventually I went for directgap.co.uk
5 years cover for £195 : Return to Invoice+ Policy with a claim limit of £10,000
I chose Direct Gap as they were the only people to offer 5 years cover and they had the best policy document of all I checked. (Transfer of cover, £250 excess cover, European cover in stipulated countries)
I would recommend staying away from click4gap as they state in their document they will only cover up to the market value of the vehicle at purchase date and also will amend your valuation from the purchase price if you buy the GAP after 21 days of vehicle purchase.
Sites to check are:
Directgap
Car2cover
Confused.com
AA
all other insurers
ala.co.uk
I hope this guide helps someone!
