So, bought a new car at the weekend and difference between trade-in of wifes car and purchase price will require no finance.

So, is GAP insurance worth having?

I think GAP only covers the difference between what your insurers pay on writeoff and the finance balance of it’s higher than your payout.

So, is GAP insurance worth having?

No.

What ‘gap’ are you insuring against?

I always thought that the Gap insurance was to cover the difference between what gets paid out on a claim and the outstanding amount at that time on the finance (assuming it’s higher) so you don’t have to make payments on something you no longer have.

I was offered the same on a cash purchase – declined as it seemed just a revenue opportunity for the salesman

EDIT – I guess if I had taken it, it would have been a classic ‘miss-sold’ case!

I also declined it on the grounds that it was yet another insurance scheme I do not want & have never needed etc etc.

So, is GAP insurance worth having?

That’s debatable. I took it once as part of the “deal” the salesman was keen to get it in, obviously trying to hit targets etc.

to cover the difference between what gets paid out on a claim and the outstanding amount at that time on the finance

Not my understanding. Basically, if you have no finance then the GAP payment covers the difference between the current market value and the price you actually paid for it. You would receive the cash difference.

GAP insurance

yet another insurance scheme I do not want & have never needed etc etc.

This to the Power of Infinity AND Greyskull.

Not my understanding. Basically, if you have no finance then the GAP payment covers the difference between the current market value and the price you actually paid for it. You would receive the cash difference.

What he said!

If you buy a 50k car cash with a 3 year back to invoice gap, and it explodes in 2.5 years – the gap insurance makes sure you get the 50k back, through your normal insurance and them pluggin the gap

Like all insurance policies, it’s only “worth it” if you claim.

If you buy a car you can afford outright with cash, then “insuring” the future value of the car is only really the same as putting some money into a decent investment account.
Of course, you need to crash you car and write it off to “make” money with the GAP insurance……..

My colleague had her 4 year old car written off in an accident a few months before the Gap Insurance was due to run out, hey presto, pay out. I paid £200 for 4years on my car, I think that was worth it.

Finance GAP – pays the difference between what your insurance company pays out in the event of a write off and your finance settlement at that time.

RTI GAP – Pays the difference between what your insurance company pays in the event of a write off and what you paid for the car when purchased. hence Return To Invoice (RTI)

Note : RTI GAP is not all the same, you very much get what you pay for. If you are paying £100 for a three year policy from some internet broker ask the question why its so cheap, ie many cheap RTI polices wont cover any accessories, delivery , taxes like RFL and 1st reg fee on new cars, and by experience they can be an absolute nightmare to claim on. Also check the maximum claim limit. This should be in line with the purchase price of the policy. ie : you don’t want a 10K maximum claim limit on a 40K car, as its unlikely to cover the difference in depreciation.

Another thing is the quality RTI polices cover the excess on your insurance (normally up to £500) if your car is less than a year old and you happen to get a new for old payout from your insurance company if the write off occurs in the first year

Expect to pay between 1.5% and 2.0% of the invoice price of the car for a good quality regulated RTI policy. Finance GAP is alot cheaper, but hardly anybody buys it any more as RTI is a superior product.

Do you need it? Well that depend on the value of the car you are buying, but arguably even if the purchase price of the car is 3K you will still get vaule out of a £300 policy is the worst should happen.

Oh and one more thing – ABSOLUTELY ask the question if the GAP policy will definitely pay the INVOICE price and not the Glasses guide retail price, as some polices will only pay Glasses guide, the reason is that the GAP company may feel you paid too much for the car in the first place and they will not honor it – this is common on some used cars, especially if there was an expensive accessory fitted such as a styling pack or leather trim.
But again you rarely have this problem with a quality RTI product.

My colleague had her 4 year old car written off in an accident a few months before the Gap Insurance was due to run out, hey presto, pay out. I paid £200 for 4years on my car, I think that was worth it.

But pretty much any insurance is worth it if you claim on it.

So, salesman unlikely to be too happy as we have declined both the Supagard at £249 and GAP at £299….but…..