Gap insurance – any advice?

We’ve recently got a car on PCP but the gap Insurance offered seemed overpriced. Looking at it myself I’m finding it a bit confusing. Any advice/tips?

This kinda annoys me as you’d think car insurance would cover you for your loss, but no! anyway I’ve just bought from https://www.ala.co.uk/ via quidco for 10% cashback

you’d think car insurance would cover you for your loss

It does cover you for your loss. You lose a one year old car, they pay for a one year old car. The fact that cars depreciate so much is not something the motor insurer wants to be covering.

In terms of insurance, new for old, even for contents, is a relatively recent concept (1980s)

First check with your current motor insurer often for the first year they provide new for old if your car is stolen or written off.

We brought a gap policy from http://www.GapInsurance.co.uk that has a maximum payout of £50K with three years of cover for £250. (Other providers are available).

As our current motor insurer offers new for old for the first year we were able to delay the start of our gap insurance for 1 year and now should our car be written off or stolen in the next four years we will be able to buy a equivalent replacement.

Note you can’t normally wait a year and then buy the gap insurance if your motor policy covers the first year, you have to buy the gap asap and defer the start date.

hth.

I would take the risk, GAP insurance has one of the worst loss ratios out there, its a goldmine for the industry

If you do happen to write your car off in the first few years you would be glad you got it.
My mum has had to use it twice in the last 3 years on +30k cars and now has an brand new 30K car sat on the drive as a result without any additional cost to her. If she hadn’t she would have been maybe 15-20K down right now.
Well worth it for a big investment.
Personally though i wouldn’t have spent 30K on a car in the first place, but it’s her money.

will be looking for this in a few months, so bookmarked, thanks

Personally though i wouldn’t have spent 30K on a car in the first place, but it’s her money.

This is the key issue, so best to ‘protect’ it.

FWIW it cost £400 for my wifes car, car new was £40k. As I said to my wife, it’s just a ‘cost’ of buying an expensive car.

Jeez, we just bought our most expensive new car ever for £20k. Too cheap for gap insurance, obviously.

I bought gap insurance, it was 1% of the car value for 3 years cover, new car for old cover. Yes it was expensive and never used but I thought it was worthwhile as it was a nice car.

Insurance payouts are never what it costs to buy a similar car, their low market value vs what you have to pay a dealer / private for similar car. See @alan’s example above

jambalaya – do I recall that you had/have an A6 Avant ? if so did you get the Gap Insurance from Audi ?

I was offered it by the dealer but didn’t take it on the Audi (car was £28k new in 2007 and they wanted £400+). I have had a bad experience with Audi dealers and would suggest you ask around as its easily available more generally for quotes and then decide. I think over 3 years cost isn’t too bad and imagine how you’d feel if car is a write off after 2.5 years and insurer offers you 60% of purchase price.

Massive waste of money, mis-sold by dealers who sell you a car at close to cost and then make a huge mark-up on the GAP and the stupid paint/seat treatment kit thing. Steer clear.

jambalaya, many thanks, have test drive tomorrow in A6 Avant Quattro 🙂

I have taken out a couple of policies with http://www.directgap.co.uk in the past. Seemed good value, but I have never claimed from them so not sure what they are like in that respect.

I did have a PCP car stolen off my drive a few years ago. I had GAP insurance, but it happened in pretty much in the last month of the PCP contract so the insurance payout settled the out standing finance. On a PCP or lease contract I would make sure you have gap insurance from day 1.

Gap insurance from Audi is really expensive. On my current car I think it was £400ish compared to under £100 from a separate company.

Had GAP insurance from ALA, 3 years cover. 32 months after taking out the policy the car was written off, paid out straight away and walked back in to the dealer with the same amount of money 3 years later. Cheapest way I have run a car for a while.

I’ve got a little Citroen DS3 on business contract hire (friend of a friend is a salesman at local dealership) – it was more than £10 a month more for gap insurance over the 18 month hire period, when I drilled down into it even he said it wasn’t worth it.

But, it’s a £16k car new, probably £12k once I drove it off the forecourt. It’s just done 9000 miles in a shade under 6 months.

I’ve got a little Citroen DS3 on business contract hire (friend of a friend is a salesman at local dealership) – it was more than £10 a month more for gap insurance over the 18 month hire period, when I drilled down into it even he said it wasn’t worth it.

But, it’s a £16k car new, probably £12k once I drove it off the forecourt. It’s just done 9000 miles in a shade under 6 months.

So if you’d have written the car off on the first day the £4k worth of ‘cover’ would’ve cost you £10 – sounds good value to me.

And the Salesman probably wasn’t making any commission on it therefore didn’t care.

Was offered it by Toyota on a GT86 but got better cover for less than half the price from ALA; ALA offered a worthwhile discount to members of the owner’s forum. Will get it again on next new car.

And the Salesman probably wasn’t making any commission on it therefore didn’t care.

Why wouldn’t he get commission? Pretty much everything a car salesman sells earns him something.

the stupid paint/seat treatment kit thing.

I ended up with one of them on my latest purchase, bundled it up as part of a deal, probably shouldn’t have bothered.

Two years gap insurance for £104 from Gapinsurance123 on a PCH. That includes an additional £2,000 cash payout to me to cover the initial payment. Cover was about £80 without this extra.

There’s a forum sponsor on babybmw.net who regularly get praised by the members for ensuring they aren’t out of pocket.

Off topic ….

jambalaya, many thanks, have test drive tomorrow in A6 Avant Quattr

Have a good time. Loved mine (last of 2.7tdi and 3 supposed to be much better), great in snow, brilliant on motorway andnworked well with auto/tip box, roomy for passengers, for same spec cheaper than an A4, ok not great for boot space, bit of a handful in a tight multi-story, recommend parking sensors front and rear (maybe new design makes it easier to see the ends but I doubt it). Mate got 12% off a Q7 via CarWow

OFF TOPIC

^^^^^ I did 🙂

not ordered it quite yet and have test in Superb 4×4 SEL Estate tomorrow…..

Not a lot in it on PCP due the huge deposit contributions from Audi….