GAP Insurance: who to buy from and cost-help please

[RandomSkodaperson]

It's like all extended insurance cover, expensive and what are the chances of a claim?

 

I only take out extended washing machine insurance if it is free. Otherwise, better just replacing or fixing if something goes wrong. Most fail after the insurance ends.

 

Yes, cars are a much larger purchase but most insurance companies cover new for old in the first year. Check you policy for details.

[SBN]

IMHO im happy paying say £150 or so for VRI GAP as my car has a 5 year warranty so ill be looking at keeping it for those 5 years. if the worst was to happen and in 4.5 years its written off it'd be well worthwhile paying that £150 and getting a £20k payout.

[Anddenton]

IMHO im happy paying say £150 or so for VRI GAP as my car has a 5 year warranty so ill be looking at keeping it for those 5 years. if the worst was to happen and in 4.5 years its written off it'd be well worthwhile paying that £150 and getting a £20k payout.

 

I think at 4 years 11 months you would be looking to have your car written off to get the payout and a nice shiny new one.

[Orville]

IMHO im happy paying say £150 or so for VRI GAP as my car has a 5 year warranty so ill be looking at keeping it for those 5 years. if the worst was to happen and in 4.5 years its written off it'd be well worthwhile paying that £150 and getting a £20k payout.

£150 for Five Years cover on a £20K+ car! May I ask where you got that from?

[SBN]

£150 for Five Years cover on a £20K+ car! May I ask where you got that from?

typo. meant to put 250 or so

[baz555]

When i get my new Skoda I'm going to buy from GapInsurance123 for my Gap Insurance, A 5 star company..

[vRSuper1]

Bought my GAP policy yesterday from ALA for £150 for 3 years. I spoke to them at great length and they weren't pushy and didn't try to 'scare' me into a policy. I went for the VRI package that replaces the vehicle to the exact same spec should it be written off in next 3 years.

Happy with what I've done - piece of mind for £50 a year.

[fiisch]

I think at 4 years 11 months you would be looking to have your car written off to get the payout and a nice shiny new one.

 

You're missing the point of GAP insurance.  No insurance (unless an agreed value policy which is generally for classic cars) will pay out more than the car is worth.  Your typical insurance policy after the first year will pay out for the value of the car at the time of the loss.  GAP cover bridges the difference between the value of the car and the oustanding finance.  If you have £19k outstanding on finance, but the vehicle is only worth £16k at the time of being written off, your insurer will pay out £16k and the GAP cover an extra £3k.

 

What GAP cover doesn't do is pay out for the value of a new vehicle.  After 4 years 11 months you would be in positive equity so the GAP cover wouldn't be effective.

 

GAP cover generally covers the 1 - 2, 2.5 year period where the vehicle is worth less than the money outstanding on the finance agreement.

[Robfab]

Doesnt it depend what GAP insurance you have?

Mine covers me back to invoice.

[bouff34]

You're missing the point of GAP insurance.  No insurance (unless an agreed value policy which is generally for classic cars) will pay out more than the car is worth.  Your typical insurance policy after the first year will pay out for the value of the car at the time of the loss.  GAP cover bridges the difference between the value of the car and the oustanding finance.  If you have £19k outstanding on finance, but the vehicle is only worth £16k at the time of being written off, your insurer will pay out £16k and the GAP cover an extra £3k.

 

What GAP cover doesn't do is pay out for the value of a new vehicle.  After 4 years 11 months you would be in positive equity so the GAP cover wouldn't be effective.

 

GAP cover generally covers the 1 - 2, 2.5 year period where the vehicle is worth less than the money outstanding on the finance agreement.

 

 

If you buy a return to invoice policy that is exactly what you get...if you paid £22k for your car and it gets written off you get the difference between £16k and £22k...to return you to where you were. By paying a little extra you can also get a policy that takes you back to a brand new car if the invoice price has since increased due to inflation etc...

[fiisch]

Surely not after 4 years 11 months?  Sounds almost too good to be true!  I must confess I have not heard of a "return to invoice" policy, but certainly this seems wide open to abuse!

 

Edit - any chance I can get one for my two year old Alfa Romeo?  I seem to have a depreciation issue.....!!

Edited 1 November, 2013 by fiisch

[octavia5]

Surely not after 4 years 11 months?  Sounds almost too good to be true!  I must confess I have not heard of a "return to invoice" policy, but certainly this seems wide open to abuse!

 

Edit - any chance I can get one for my two year old Alfa Romeo?  I seem to have a depreciation issue.....!!

 

All GAP insurance companies offer 'Return to Invoice' some also offer 'Like for Like Replacement' at the current new replacement price - so you get a brand new version of the car that is written off, different policies cost different amounts.

 

You normally have to take out the policy within 90-120 days of the original purchase, some companies will sell polices for the purchase price of secondhand cars, some only deal with new car cover.

[fiisch]

I was asking tongue in cheek for my Alfa...  I doubt anyone would want to provide me with return to invoice cover, as it's lost >£12k in two years!  I'd be interested if anyone on here has ever actually had to use this cover?  The premise seems to contravene the principle of idemnity, and potentially leaves the consumer in a better position than they were prior to the loss. 

[bouff34]

I was asking tongue in cheek for my Alfa...  I doubt anyone would want to provide me with return to invoice cover, as it's lost >£12k in two years!  I'd be interested if anyone on here has ever actually had to use this cover?  The premise seems to contravene the principle of idemnity, and potentially leaves the consumer in a better position than they were prior to the loss. 

It's no different to new for old cover on your house contents insurance...

[Anddenton]

It's no different to new for old cover on your house contents insurance...

 

Bit easier to buy a second hand Octavia than it is to buy a 5 year old Sony Bravia but the general gist is correct. Your insurance will go up a bit but I still say its a cheap way of getting a new car every 5 years if you're a bit unscrupulous. 5 year old Octy worth £5k gets written off and you get a cheque for £15k from the GAP insurance + £5k from car insurance to go out and buy a nice new model. All for circa £150 outlay (And a loss of scruples - I would personally never have the nerve to try this!)

[baz555]

Gap Insurance for £50 per year...!!!

Thats very cheap..  what car are you getting 

I'm getting quotes around £100 per year for 3 years on a combined return to Invoice 

with a vRS valued at £25,000

[Orville]

Bit easier to buy a second hand Octavia than it is to buy a 5 year old Sony Bravia but the general gist is correct. Your insurance will go up a bit but I still say its a cheap way of getting a new car every 5 years if you're a bit unscrupulous. 5 year old Octy worth £5k gets written off and you get a cheque for £15k from the GAP insurance + £5k from car insurance to go out and buy a nice new model. All for circa £150 outlay (And a loss of scruples - I would personally never have the nerve to try this!)

I guess the other side of the coin is that if the Insurer determines deliberate policy abuse, you end up with no payout, no car, probable criminal prosecution, and you have still had to pay for the Gap cover too.

[vRSuper1]

Gap Insurance for £50 per year...!!!

Thats very cheap..  what car are you getting 

I'm getting quotes around £100 per year for 3 years on a combined return to Invoice 

with a vRS valued at £25,000

Yep, £50 / year. Just taken delivery of a vrs diesel estate. ALA supplied the GAP on a VRI policy with a £15k allowance. I spoke to a lady advisor there who explained everything and gave me a £28 discount over the phone. Job done.

I've never paid for GAP before and always had doubts about it. I spoke to my insurance company and they couldn't 100% be sure they would replace my exact spec on my vehicle like for like should it be written off. Poor really so I went for reassurance and bought GAP.

[baz555]

Yep, £50 / year. Just taken delivery of a vrs diesel estate. ALA supplied the GAP on a VRI policy with a £15k allowance. I spoke to a lady advisor there who explained everything and gave me a £28 discount over the phone. Job done.

I've never paid for GAP before and always had doubts about it. I spoke to my insurance company and they couldn't 100% be sure they would replace my exact spec on my vehicle like for like should it be written off. Poor really so I went for reassurance and bought GAP.

I had Gap on my last one..worth having....

I'm waiting for my Hatch vRS Tdi..

whats the website on the gap you got please ... so i can look in to it..

[Robfab]

I went ALA too £130 i think for 3 years with £10k or £15k cant remember.

[james_19742000]

Seems that ALA are competitive on price etc, for return to invoice value, effectively getting you out of the car and finance in the event of a loss, so no financial problems etc, which I think is what most people take GAP for, so how does it compare with Skoda's own GAP?  I have usually taken manufacturers GAP mainly as I had worked on the assumption that if my finance is with them, th car was bought from them and then the GAP then its all under one roof as such so it would be easier to sort in the event of ever needing it?  However is ALA or whoever else is offering a better value and more protected product then I would look at going elsewhere, just curious if anyone had actually looked at the differences??

[vRSuper1]

I had Gap on my last one..worth having....

I'm waiting for my Hatch vRS Tdi..

whats the website on the gap you got please ... so i can look in to it..

Hi there, it is Ala.co.uk. I would get a quote online, read through their Ts & Cs and then speak to them. That's what I did.

[JerryT]

If you are considering Gap insurance then do take a look at the Which site if you are not totally familiar with what such a policy could provide.

Also Chris Knott Insurance, one of the site sponsors offers Gap insurance at reasonable prices.

Or do as Lady Eleanor has done and take it from the dealer. But never pay full price, 50% reduction should be easily achievable based on their prices.

Check with your insurance company what they will do in the case of a total loss in the first/second year as this can influence your Gap premium. For a three year Gap policy you are essentially only insuring for two years as in the majority of cases your insurance company will replace your car if you were to suffer a total loss in the first year.

Check what type of Gap insurance you are buying, whether it is;

Return to invoice, so covers the gap between any insurance payout and what you paid for the car.

New for old, so will put you back into a brand new car of the same type and extras by covering the difference between the insurance payout and the OTR price for your new replacement vehicle.

Or simply pays the difference between outstanding finance and the insurance payout so you are not out of pocket.

I hope never to need the Gap insurance but doing 25000 miles a year, and therefore being at greater risk of an accident, I felt this time round for the sake of £200 quid it was worth it.

[staveros]

Don't post on here very often but this is a subject I have looked at quite alot recently. Since I joined the forum I have began working in the insurance industry, and recently have had to take a close look at the Gap Insurance market (as are the 'new FSA' - the Financial Conduct Authority). One of the major issues has always been with Gap is that the competition in the market is not all that great, and most people still buy there policies from the motor dealer without ever exploring the options elsewhere.

 

Unfortunatley the motor dealers can resort to tactics that can be used to scare off people from buying from an independent retailer. In reality the independents use the same insurers as the motor dealer products, and the claims process you go through will be exactly the same. The motor dealer premiums are so much higher than the independents, and of course this is mostly due to a higher rate of commission they will retain. However you also pay a higher rate of Insurance premium tax (IPT) when you buy from the car dealer you buy the vehicle from, 20% as opposed to the 6% you pay if you go elsewhere.

 

The long and short of it is that the motor dealer products are just very expensive.

 

The Which report (already highlighted here) is a great place to look, and a report has also been made by a company called Defaqto (although it has to be said it was pointed out to me that this report was full of errors). The gist of it is that the independents have much cheaper products AND in many cases better policy features too.

 

In terms of the types of cover then there are basically three:

 

Finance Gap - covers any shortfall between the vehicle value and the finance or lease settlement.

 

return to invoice - covers the difference between the vehicle value and the original invoice price

 

Vehicle Replacment or VRI Gap - covers the difference between the vehicle value and an equivalent replacement. If the price of the equivalent is higher than you originally paid then it is this higher amount that is covered. This is the type that causes most confusion, and for several reasons.

 

The 'equivalent replacement' will be the same age, mileage and spec vehicle at the time you bought it. So if it was brand new the it would be the brand new replacement, if it was 3 years old when you bought it, then the 3 year old replacement. Most of the better VRI policies will pay you the funds to replace the vehicle, and not actually replace the vehicle for you. This allows you to choose how you replace the vehicle and not have one imposed.

 

However, VRI policies in the market can differ from this. Some may replace the car with one they deem an equivalent, or only offer you a cash settlement of the original price you paid (so RTI basically). If you take a VRI product that pays the cash equivalent of a replacement then you could be thousands of pounds better off than a VRI that only pays you the original price your paid.

 

It is pretty crucial to check the policy terms to see which 'VRI' you are getting. Whilst I am not going to name names (dont want to be accused of being a spammer!), some of the providers mentioned already on this thread may not have as good policy terms as some of the others. Check the t's and c's for what is covered and on the basis that claims are settled.

 

As many have said already, there are quite a few motor insurers who will replace your brand new vehicle in the first year. If this is the case then some Gap Insurance products will allow you to defer the start date for 12 months.

 

Remember you do not have to have Gap Insurance at all, it is just your decision. But if you do then you will probably get a much better deal by going with an independent provider.

 

Hope my little bit helps, and I know..................I need to get out more!

Edited 2 November, 2013 by staveros

[staveros]

Seems that ALA are competitive on price etc, for return to invoice value, effectively getting you out of the car and finance in the event of a loss, so no financial problems etc, which I think is what most people take GAP for, so how does it compare with Skoda's own GAP?  I have usually taken manufacturers GAP mainly as I had worked on the assumption that if my finance is with them, th car was bought from them and then the GAP then its all under one roof as such so it would be easier to sort in the event of ever needing it?  However is ALA or whoever else is offering a better value and more protected product then I would look at going elsewhere, just curious if anyone had actually looked at the differences??

 

If you check out the policy terms from the dealer you will find that it is highly unlikely that the Gap claim is handled by the manufacturer at all. It will be an insurance administrator, usually one that is also used by one or more of the independent brands you will find. The same can be said of the insurers too, many of the products share the same underwriters.

 

The salespeople may try to tell you otherwise, but you check will not be coming from the manufacturer.

Edited 2 November, 2013 by staveros