GAP insurance for private purchase

[kam09]

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

 

[wemorgan]

why do you need GAP insurance - is the car being financed?

 

[tec]

It will be back to invoice, as replacement option is for new cars.

The invoice is the receipt of purchase of your car.

 

[kam09]

why do you need GAP insurance - is the car being financed?

Car will be bought by cash.. Shall I still go for gap?

 

[kam09]

It will be back to invoice, as replacement option is for new cars. The invoice is the receipt of purchase of your car.

Ok that's what I was looking at,, any good reputable company you know off that I can get a quote from?

 

[kam09]

ALA and warranty direct I'm thinking.. What would I roughly be expecting to pay per month?

 

[alzieboy]

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

 

[219]

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 .

 

[219]

Duplicate post

 

[kam09]

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??

 

[Dryce]

Car will be bought by cash.. Shall I still go for gap?

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.

 

[Dryce]

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*

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?

 

[kam09]

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.

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..

 

[kam09]

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?

Lol nicely put! Will have to think about it..

 

[Deleted member 37751]

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?

 

[Spinal]

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...

 

[kam09]

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?

Yes ideally *if* the worst was to happen .. But isn't that what gap is supposed to do lol?

 

[kam09]

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...

I'm not sure that's why I'm just gathering info on it all.. Then see what options I have..

 

[IanMSpencer]

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?

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.

 

[219]

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 .