I know its been done to death, here and elsewhere, so apologies

 

But, I was looking into gap with RTI or the VRI and I'm still unsure on what is the best one to go for.

 

I have a Monte Tech Est, from new, and when looking at the VRI how would they decide on a replacement? say in 2 or so years, as obviously they wont be available then. Do they just go with whatever Skoda are selling at the time and look at similarities, or do they give you a choice of vehicle, or cash equivalent?

 

Has anyone any real world experience of VRI, and or RTI gap? Is it as simple and straightforward as they make it sound?

 

Its not the first new car Ive ever had, but for some reason it's the first time I've ever thought about GAP

 

Obviously this is only for worse case scenarios, but I'm guessing it helps ease the worry when leaving the car parked

 

Cheers

 

I previously didn't have GAP insurance however seeing the ENORMOUS depreciation on my last car (VW Touareg 245PS TDi) which lost £22,000 in 11 months (OK, it did also have 38,000 miles on it at 11 months old) I decided that GAP insurance did indeed look like a good idea. I went with RTI though ALA but even they state that in the last year of a 4 year insurance term they will only make up £25,000 of the GAP back to the original invoice price. I paid £295 for 4 years cover on a car that cost £56,000 new and that the dealer admitted was probably worth about £42,000 the moment I drove it away. Fortunately, it's leased, but the small print on the lease says I have to pay for it if I smash it. Hence the GAP insurance.

I think I should have put this in insurance section?

It seems a no brainer to me - I have a car, that isn't mine til I finish paying for it.

 

But if it gets smashed or stolen, I have no car and I owe the remainder on it still.

 

Gap insurance covers the amount owed on the car (with some small print exceptions - probably if I torch it or something).

 

I don't know of the other type, that will give you a like for like replacement, but if they don't do your model, perhaps they give you the value to replace on the used market? Or clear the loan for you, absolving you.  In which case, you start again.

I stuck this in a this thread http://www.briskoda.net/forums/topic/293343-gap-insurance-who-to-buy-from-and-cost-help-please/page-2 a while ago, it may help and you may want to have a read through the thread too.

 

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!

It is never clear even when it explains the 3 types.  

 

GAP,

 that is between the Motor Insurance you pay to Insure the Car Fully Comp, and what you get.

 So if the Settlement cost with say 'Admiral is £16,000' and the Car financed is £20,000,  then there is a Gap, 

& thats what it is about, 

 Car Insurance and that Settlement, seems to seldom get a mention.

 

george

Who are some good companys to use?

Thanks for the info everyone!!

 

Looking around the two that come up the most are ALA and Click4gap, theres probably loads more.

 

Just looking and doing quotes now :peek:

The dealers i have used and said about gap ins is you get back full invoice price  so you are not in negative equity like the vat so your finance is paid off. or a new car

It is never clear even when it explains the 3 types.  

 

GAP,

 that is between the Motor Insurance you pay to Insure the Car Fully Comp, and what you get.

 So if the Settlement cost with say 'Admiral is £16,000' and the Car financed is £20,000,  then there is a Gap, 

& thats what it is about, 

 Car Insurance and that Settlement, seems to seldom get a mention.

 

george

 

I think what you are describing is Finance Gap, the oldest and most basic cover which will pay between the vehicle value and the outstanding finance settlement. They way finance is stuctured these days, with 'front loading' of interest now a thing of the past, there are few occassions where you would find much of a benefit to finance gap. If you have put a reasonanble deposit in, for example, there is little chance of you being in this 'negative equity' situation.

 

There should not be a difference between the 'vehicle value' and the figure your motor insurer offers either. They are obliged to pay from the market replacement value of the vehicle, and this is derived by the Retail Value provided by trade books like Glass' Guide. If they offer a low figure then you need to haggle, or if you have Gap Insurance they will normally haggle for you.

 

The normal type of cover offered in a motor dealer is the return to invoice cover, which is usually a 'combined' cover. This means that it would cover from the vehicle value to the higher of either the original invoice price, or the outstanding finance settlement if that were higher at the time you make a claim.

 

Vehicle Replacement Insurance is not normally offered by motor dealers, but if you have a good deal on the vehicle you are buying then the better online providers will give you a cash settlement to the future replacement cost. So if the original vehicle that you bought new was £15,000, and the equivalent new one is now £18,000 then the better online providers will cover you to the £18,000 as a cash settlement. A bit like a 'new for old' cover on your household contents.

Edited 11 February, 201412 yr by staveros

The dealers i have used and said about gap ins is you get back full invoice price  so you are not in negative equity like the vat so your finance is paid off. or a new car

 

If the price of the equivalent new car has gone up from the original invoice price then return to invoice will not get to to the price of a new car. Motor dealers often say it would (they are great at promising the moon on a stick if you let them!) but the original purchase price will probably still leave you short.

 

Still not a bad solution if you have RTI and you made a claim though, but VRI may be a better solution

It all sounds good though in theory, but I would like to hear if anyone has any real world experience of using GAP insurance, whether its VRI or RTI, some of the figures Ive seen on ads seem a bit too good to be true really?

 

You would think normal car insurance would have this as an addon? I got a VRI quote from ala fror me Monte, for £139 over 3 years, I would happily pay an extra £50  year to me normal car insuraers if they included this.

 

Just seems a bit strange to me, lol :think:

If the price of the equivalent new car has gone up from the original invoice price then return to invoice will not get to to the price of a new car. Motor dealers often say it would (they are great at promising the moon on a stick if you let them!) but the original purchase price will probably still leave you short.

 

Still not a bad solution if you have RTI and you made a claim though, but VRI may be a better solution

I know but a least it pays your finance off then you just start again. If the car is right off 3 years later it still goes back to invoice as i understand. And may get a better deal