GAP Insurance

C

californiagirl

Member
Hi there, have had several things to sort on our cars and today I have finally got down to doing 2 of them, the 3rd I'm having problems with

We bought a brand new BMW Z4 in September on lease with a balloon payment after 4 years if we want to keep it. The dealer tried to sell us their GAP insurance but at £400 we didn't buy it. We are both now worried about what would happen if it was written off (not that we are planning to or have been bad drivers in the past, but accidents happen), especially once it is a year old or so. We have found some quotes online for around £150 for the 4 years which sound great after £400 but do we really need it? The Money Advisory Service site says that less than 10% of policies are used making it very poor value, but that is what you have insurance for isn't it, the unforseen!

Our 330d tourer we paid for in full and is almost 2 years old and we are thinking of covering it as well, if anything more so as that is all our investment.

Any thoughts?
 
I think you are still within the period when you can get a GAP policy after buying a new car ... I think it is 6 months ?

I have used ALA and found their service superb (but not claimed). They also have a good reputation and prices are loads better than BMW.

I got a 4 year GAP return to invoice policy from them for about £200 'ish on my 1 year old Z4 35iS.

Have a look at their site. I think GAP is worthwhile - there may not be many claims but the point is, as you say, it is insurance ! I bet the small number who had to claim were glad they had it and didn't end up still owing thousands on a finance agreement / PCP !

http://www.ala.co.uk/?gclid=CjwKEAiAoJmlBRCxjKeizPHVs1ESJAC6cxjUp0hOhVZ3Cug3TNf3l1x9Am6nJqCj525p3TRDP63jjhoC82Hw_wcB
 
I've used ALA on my cars and I think it's worth it.

I only had my Golf GTI 6 months before it was stolen and didn't have GAP.

The insurance payout was £1800 less than the purchase price. £150 for 4 years back to invoice is a no brainer for me
 
bluestreak56 said:
Here a guide I wrote when buying mine..

http://www.z4-forum.com/forum/viewtopic.php?f=2&t=34430&hilit=+gap
Click to expand...

Thank you, just read it all. I had searched before posting but obviously not the right way!
 
Normal practice for Car insurance policies when a car is a write off within the first year is New for old, ie you get a replacement new car.
So check your insurance policy for this. Some do not do it as standard, as DPG may have found out.

The likelihood is that your car will be worth less than the money you still owe on the car should it be written off so it would be a sensible precaution to take it out if you feel that you would want to make up that difference and couldn't afford not to. In this case you need Finance Gap Insurance.
If you want the purchase price back, you need Return to Invoice Insurance.
I think it's a fair value for money product for peace of mind, even if you could afford the difference.
 
GAP insurance is useful for high value cars, newer cars (depreciate quicker) and when you are early on in your finance agreement for obvious reasons (negative equity).

If it worries you I would recommend keeping an eye on the market value of your car vs finance settlement amount. If you are content with picking up the likely negative equity if your car gets written off, don't get GAP insurance. If you are worried then get GAP insurance. £150 is pretty cheap!

If you're likely to be faced with a large amount of negative equity then it's probably worth it. I tend to think about insurance in this way - taking into account the probability of me needing to draw down on an insurance policy, if I insure something for my entire life, does the cost of the insurance over that time add up to more or less than the amount it would cost me to sort the issue if I didn't have insurance? E.g. Phones insurance is about £8 a month, I have never lost or broken a phone, lets say I live for another 40 years, that's £3840 (8x12x40) worth of payments and would mean to get value from that I would have to lose or break >7 iPhones over the remainder of my life. I really can't see me doing that and am willing to risk it! However I do have insurance through my bank as I use the other benefits as well! The other consideration is can I afford to cover the cost of sorting the issue at short notice? For an iPhone, yes.

To put that into GAP insurance terms I would say it is unlikely that most people will have more than one car written off over 40 years, £150/4 years x 40 years = £1500 of payments. It is likely to cost more than £1500 if you have a car written off so it might be worth doing as I would have thought you have a fair bit of negative equity at the moment.

GAP insurance also offers a benefit that it will allow you to buy a newer car than what you had, effectively writing off your previous interest payments and depreciation.
 
BMW offered me a discount - £800 down to £600 for three years. Mmmmm.........

Chris Knott - £151 for three years. Easy one this.
 
bob4333 said:
BMW offered me a discount - £800 down to £600 for three years. Mmmmm.........

Chris Knott - £151 for three years. Easy one this.
Click to expand...

Each time I have mentioned the internet in relation to GAP the sales staff have groaned and moved quickly on :D
 
SO8 said:
Each time I have mentioned the internet in relation to GAP the sales staff have groaned and moved quickly on :D
Click to expand...

How very strange given the business they're in....... When I enquired about an annual policy they mentioned GAP and said it was available irrespective of whether or not I took out the main policy with them. After the comedy of £600 from BMW I was all ears. To my shame I've forgotten the name of the helpful young lady I first spoke to, but when I called back to sort it she wasn't there and Rebecca got it all moving.

I also decided to take out the annual policy with Chris Knott after trying several internet companies: when it came to analyse the details over the 'phone with the web insurers the price rose from a 'net price of £170 ish to about £260 when it was all brought to an acceptable level of cover. How about only being covered to use their own garages to repair my new Z4 if it was damaged? Yeah right......

When I eventually got them to tell me who was on the list of their "approved" repairers I checked a couple out they had terrible reputations.

For not much more CK typed into the policy that I could use a BMW approved repairer of my choice, and a few other things were also chucked in. If you're unfortunate enough to have your pride and joy left on the side of the road looking like a train wreck you don't want Burke and Hare coming up the road to collect it.
 
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