MegaSack DRAW - This year's winner is user - rgwb
We will be in touch
I definitely see the point on a new car to cover the instant hit of depreciation, but also a lot of ins policies cover 'back to new' in the first year anyway either as std or an extra.
But for second hand? Just shook hands today on a 2yo Kia; for about 65% of the new price so the depreciation is already gone. If I was to have a total loss and I only got back the value at the time, I can then just spend that on a similar car to what was totalled - so say that happened in 2 years time, to a 4yo car i get back the value of a 4yo car from insurance and buy another 4yo car. I'm where I'd have been anyway - OK I might lose excess and you don't get what you think it's worth and have to haggle and blah blah..... but you don't stand to lose out as you wuld on a new one?
I see the attraction that for a modest £200 outlay that you can total a 4yo car and then they put you back in a 2yo one again, but is that it?
If you do think GAP is a sensible idea (with reasons) - do you have it / whose did you buy (not paying for a dealer policy at 2x the cost of online) and if you've used it did it do what it said on the tin.
Is it on finance
And don't buy it from the dealer
Bought an 8 month old car and it was an option but decided against it both from dealer and online.
I weighed up the chance of a complete write off vs the likely difference in pay out to car value. I decided to save our cash.
Strictly though, GAP insurance is to cover the difference between your car value and any finance you owe, should the car be written off.
no, it's a bank loan..... much better rate!
And no - dealer price more that double most of the prices I found online, but while I can find some that are 1/4 the price of the dealer's price I do tend to think that if they're too cheap they probably have too many clauses and exclusions, etc.
GAP insurance is to cover the difference between your car value and any finance you owe, should the car be written off.
Not always - can get to cover return to new or return to invoice (eg: where discounts you got first time might not be available again / new model years with higher pricing, etc.) as well as covering your finance.
Not always – can get to cover return to new or return to invoice (eg: where discounts you got first time might not be available again / new model years with higher pricing, etc.) as well as covering your finance.
See P-Jay's comments on the thread I started on this
https://singletrackworld.com/forum/topic/gap-insurance-8-month-old-car/
On finance? Probably worth it. Quite surprised to find that my dealer beat all the online quotes when I bought the car.
It’s improtant to know what you’re buying, for the love of god don’t buy it from he dealer unless you read the policy very clearly, they will often sell useless bits of paper for a few hundred quid.
’Tradtional’ Gap insurance is there to pay the difference between the insurance payout and the settlement figure of finance secured on the vehicle. If you’re buying S/H and / or with a meaningful deposit the deprecation curve shouldn’t dip below the settlement figure so its useless. Also it will NOT cover personal loan shortfalls. It’s only good if you’re buying new and / or with a small deposit where you’re in negative equity with it at the start. BUT it’s worth noting most insurance companies offer ‘new for old’ cover for the first years of a car’s ‘life’ as standard so it’s rare for traditional Gap to be of use.
The better product used to be called RTI (return to invoice) this paid the difference between the buy price (or invoice price hence the name) and the insurance payout meaning that in theory you could write of a car after 3 years and collectively get the full cost of the vehicle back to buy a new one (or usually buy a siimular age car or somthing else and pocket a few grand).
Too many shady dealers are selling Gap as RTI and to people paying cash or personal loan which is completely useless. The commission on Gap type policies is often 25% which gives you an idea of its real value.
The better product used to be called RTI (return to invoice)
Got this from ALA for £140. Dealer wanted £385.