GAP insurance for private purchase

Discussion in 'Insurance & Finance' started by kam09, May 12, 2015.

  1. kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    Hi, much needed opinions/experiences on a recommended policy for a private purchase from a non mb dealer? Car is a 61 plate c207 approx 60000 miles an will cost 18000
    Should I go for back to invoice or replacement?
    Who shall I get a quote off? And what shall I look out for in regards to small print etc..?
    Cheers kam
     
  2. wemorgan

    wemorgan MB Club Veteran

    Messages:
    8,120
    Joined:
    Apr 5, 2008
    Car:
    A205 C220d
    why do you need GAP insurance - is the car being financed?
     
  3. tec

    tec Hardcore MB Enthusiast

    Messages:
    600
    Joined:
    Mar 31, 2015
    Location:
    South Midlands UK
    Car:
    CLK320 CDi SPORT V6
    It will be back to invoice, as replacement option is for new cars.

    The invoice is the receipt of purchase of your car.
     
  4. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    Car will be bought by cash.. Shall I still go for gap?
     
  5. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    Ok that's what I was looking at,, any good reputable company you know off that I can get a quote from?
     
  6. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    ALA and warranty direct I'm thinking.. What would I roughly be expecting to pay per month?
     
  7. alzieboy

    alzieboy Hardcore MB Enthusiast

    Messages:
    668
    Joined:
    Nov 2, 2013
    Location:
    NORFOLK
    Car:
    E350CDI sport Coupe / VW Golf 2.0 GT TDi
    Does Not have to be a new car to have return to invoice Gap insurance, I took out return to invoice Gap insurance on a 8 month old demonstrator.

    Used a company called DirectGap
     
  8. Pontoneer

    Pontoneer MB Club Veteran

    Messages:
    11,254
    Joined:
    Aug 19, 2002
    Location:
    Ayrshire
    Car:
    '93 190E 2.3LE W201 ; '93 300SL-24 R129
    Surely the only time you need gap insurance is where the car is on finance and the amount owed is greater than the value ( replacement cost ) of the car ?

    My simplistic understanding is that , apart from the above , the insurer of the responsible party has to put you back in the position you were in prior to the incident and if doing that costs £X then that is what they need to pay out .
     
  9. Pontoneer

    Pontoneer MB Club Veteran

    Messages:
    11,254
    Joined:
    Aug 19, 2002
    Location:
    Ayrshire
    Car:
    '93 190E 2.3LE W201 ; '93 300SL-24 R129
    Duplicate post
     
  10. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    My thinking is I don't want in a few years down the line to have an accident for example and the car is written off for insurance to only pay out an amount way below what I payed for it in the 1st place hence looking at back to invoice gap to cover my ars* ..I'm pretty sure this is common practice amongst cash buyers??
     
  11. Dryce

    Dryce MB Club Veteran

    Messages:
    6,106
    Joined:
    May 17, 2006
    Car:
    ..
    Many people buy GAP because they are buying using finance and they fear that if the car is written off then the value of the car will be less than the outstanding finance. So they will be left with no car and the liability of the difference between the outstanding finance and the settlement value on the car.

    Some people 'enhance' the GAP insurance by going for return to invoice.

    Is it worth it?

    Well arguably for somebody who is badly exposed on the finance it is *if* they get it cheaply enough.

    However it's generally assumed that GAP is very profitable because the companies underwriting it pay out a lot less than they take in premiums. So that implies GAP is poor value for money.

    So that implies those who are not exposed financially by the finance and personal circumstances are going statitiscally do better by not coughing for it - even at a discount.

    However some people put a price on peace of mind .... in which case that may alter the balance of cost vs risk vs return back towards coughing for it.
     
  12. Dryce

    Dryce MB Club Veteran

    Messages:
    6,106
    Joined:
    May 17, 2006
    Car:
    ..
    The car is a depreciating asset. So if after three or four years it gets written off and you get back what it is worth .... then that is a fair return. You have an X year old car that gets totalled - you get a settlement that notionally allows you to get a replacement X year old car. This means no loss.

    So you're not treating GAP as something that is covering your rear quarters but as either a gamble or an investment. That's because you're looking to get more than the car is worth should it be totalled and recover your depreciation.

    So your decision. Is GAP a good gamble or not?
     
  13. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    Yes I want peace of mind.. I want the fact that if I write the car off in say 3-5 years time I will get paid out the invoice amount not the going rate for the vehicle that will be 3-5 years older and worth a lot less than it was at invoice..
     
  14. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    Lol nicely put! Will have to think about it..
     
  15. SPX

    SPX MB Club Veteran

    Messages:
    14,728
    Joined:
    Aug 29, 2010
    Location:
    Ap Norf
    Car:
    That one
    I'm a bit confused (some might say that's not too hard)...

    Are you saying that if the car is written off in an accident in a few years time you want GAP to pay the difference as to how much you paid for it now?
     
  16. Spinal

    Spinal Hardcore MB Enthusiast

    Messages:
    4,793
    Joined:
    Sep 14, 2004
    Location:
    Uxbridge
    Car:
    Smart, S320 and C180 with 3-pointed stars amongst others
    Wouldn't an agreed value insurance be a better place to start? Then instead of having a normal policy and a GAP policy, you just have one, for an agreed value...
     
  17. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    Yes ideally *if* the worst was to happen .. But isn't that what gap is supposed to do lol?
     
  18. OP
    OP
    kam09

    kam09 Hardcore MB Enthusiast

    Messages:
    461
    Joined:
    Jul 1, 2013
    Car:
    E350cdi coupe sport obs black
    I'm not sure that's why I'm just gathering info on it all.. Then see what options I have..
     
  19. IanMSpencer

    IanMSpencer Active Member

    Messages:
    95
    Joined:
    Mar 26, 2014
    Car:
    C220Cdi Estate
    Oddly that is exactly what GAP to invoice offers, for less than a couple of hundred pounds.

    The question is "How many cars are completely written off?" GAP doesn't cover the depreciation of a car that is damaged and repaired for example.

    So GAP insurers can offer this insurance cheap because it doesn't happen often.

    The trouble is that what you haven't covered is "How to pay for a replacement car in x years time". So most people would not consider GAP because they are already considering how they would finance the next car in X years without GAP insurance.

    GAP makes sense if you are at the edge of affordability, where that couple of hundred quid can avoid you having to seriously downgrade a car because you can't afford the replacement costs.

    Beware that GAP may not cover the entire invoice cost though, not all extras and costs are necessarily included.

    To the OP, cash buyers have probably never considered GAP. As far as I am aware it is only recently become a popular insurance, coming to the surface as part of the personal leasing market.

    I didn't think it offered good value for money, but then I last wrote off a car 30 years ago and I'd only paid £900 for it about 2 years before.
     
  20. Pontoneer

    Pontoneer MB Club Veteran

    Messages:
    11,254
    Joined:
    Aug 19, 2002
    Location:
    Ayrshire
    Car:
    '93 190E 2.3LE W201 ; '93 300SL-24 R129
    That all sounds fraudulent to me .

    If such insurance really were intended to provide you with a new car after you had had several years use of and written off your old one - what is to prevent an unscrupulous scammer from intentionally writing off his car because he wants a new one on the insurance company .

    Insurance is only meant to put you back in the position you were in before a loss - anything more is called 'betterment' and is either deductable from the settlement or chargeable back to the customer .
     

Share This Page

  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.