GAP Insurance

[Palfrem]

My sister in law is buying a new Yeti and the dealer is offering GAP insurance at £299

Lots of similar policies on the net for £100 ish.

Is is worth buying? I've never had a car written off or stolen in 35 years of driving....

What are the team's thoughts?

 

[davidjpowell]

It's worth buying if you car is written off....

two types. Once settles any shortfall between finance settlement and write-off value, other is RTI - Return to Invoice and will pay the difference between write-off value and the price you paid.

 

[grober]

Most insurance policies offer "replacement with new" in the event of a write off for a car up to a year old. Gap insurance is usually for first 3 years thus effectively covers only 2 years.

 

[davidjpowell]

Some gap policies will defer the first year to cover that...

 

[sjmaxwell]

I know someone who had to use it when their 6 month old C class was written off last year!

 

[jc1kz]

I know someone who had to use it when their 6 month old C class was written off last year!

and what happened? did it work? did it pay out like it should? What????

 

[sjmaxwell]

and what happened? did it work? did it pay out like it should? What????

It did! It was the MB cover and they ended up upgrading to an E Class, one thing I remember them saying though is that their old car is back on the road after an independent garage repaired it!!!

 

[Dryce]

Is is worth buying? I've never had a car written off or stolen in 35 years of driving....

What are the team's thoughts?

It depends on the risk you think you're covering vs the cost vs the ability to cover it.

And then there are those who are looking to return to original invoice value - which is not just covering the risk but looking to boost the value in the event of a write off.

Generally it's not worth buying at the dealer. I was offered GAP at £499 when sufficient cover was available at £129.

What's the risk?

Well write off risk is small. Not negligible. But small. The insurance in it's 'pure' form only covers the difference between your insurer's payout and the value of the vehicle.

So how much is that worth? Well the insurer will often replace a new purchase vehicle in the first 12 months anyway if it's written off. So GAP is possibly of limited value in year 1 - and that's where you usually take the biggest hit.

OTOH if you buy a preregistered 'new' car your insurer won't necessarily give you that first year protection. So value of GAP for this type of purchase is a bit higher.

And buying used at 1 year or more old then the big depreciation hit has been taken so GAP should be lower cover and cheaper.

Buying RTI GAP is a different calculation. The value lof the GAP with RTI is higher - but the cost of the insurance will be higher too.

Then there's 'peace of mind' value.

Personally if I was buying a new car outright I'd not buy it.

If I was buying an expensive used car on finance and I felt exposed should there be a disagreement on the value and clearing outstanding finance. Then I'd think about buying it.

If I was buying an expensive new car on finance then I'd look at the exposure after year 1 and then make the decision as above depending on exposure.

And personally I wouldn't buy based on RTI unless the cost of the RTI policy was a very small increment on the normal policy. And I treat that increment as a high odds bet.

So in summary the answer to you question .... is 'hmmmmmm - make your own mind up'.

 

[joecash]

imho - before buying "extras" from a dealer shop around - they usually rip you off - common extras are "insurance related" "bodywork protection" "mud flaps" "car mats" or anything else they can get you to buy with your wonderful new car purchase when you are at your most vulnerable. Just my view, even my children say I'm more than a bit tight. grandchildren don't, I love spoiling them!!

 

[Rory]

I've never had a car written off or stolen in 35 years of driving....

That's why GAP (at least bought on-line) doesn't cost very much - it's a rare event that someone needs to claim.

Arguably it's more relevant on a cheaper car as it takes less to write it off!

But then if you've got a top spec MB, BMW etc, there's probably more chance of it being stolen and not being recovered.

For prople who buy cars with heavy finance it's probably sensible to take GAP as you could end up owing more than the write off value of the car.

Like most insurance, you're buying peace of mind more than anything else.

 

[Palfrem]

Thanks everyone.

As always - you pays yer money....

 

[sjmaxwell]

Exactly. Lets not forget that insurance is there to restore you to the position before the incident so as others have said the choice is yours!

 

[Danaf]

My sister in law is buying a new Yeti and the dealer is offering GAP insurance at £299

Lots of similar policies on the net for £100 ish.

Is is worth buying? I've never had a car written off or stolen in 35 years of driving....

What are the team's thoughts?

Hi,
We offer a slightly different product whereby it pays 25% over the insurance companies settlement figure. Whilst it's not a direct comparison for traditional GAP insurance we feel it's a very competitively priced product.
Regards,
Dan.