Since I bought it the value of my car has declined considerably partly due to the manufacturer giving big discounts on new ones.  I’m thinking that if I have an accident and the insurer writes off my car they will offer me a small sum in compensation that will see me struggle to replace the car. So I’m thinking I should take out a GAP policy, but I’ve never done that before so I’m wary of making a mistake, and the advice of the hive mind would be most welcome! Anything special to look out for? Any good or bad experiences to share? Thanks!

I used to arrange (finance) gap insurance years ago. It often lost money for the insurance company! But that was also a function of the absolutely outrageous commission earned by dealers on it.

Selling of gap by most of the gap insurers has been suspended by the FCA due to this commission.

So, if you can buy it at the right price then it’s worth having. When I had a leased car I bought lease gap from ALA. There are other providers and this has been discussed on here before (good luck!). I’ve never claimed on it so no recommendations there. I think I originally got the ala name from asking on here.

There are different types, from finance gap (pays difference between motor insurance settlement and amount remaining on finance) to lease gap (pays remaining lease payments IIRC) to “return to invoice” gap which can pay back to your original purchase price. That might be the one you want, but from memory it’s the most expensive.

If values have fallen then won’t you need less to buy another car that is similar age/spec to your current one?

In a total loss scenario an insurance company might offer to pay a ‘market’ value that is not the same as cars actually on the market. But if this happens then I think others may be able to comment from experience on the ability to present them with market evidence and ask them to reconsider their offer.

If values have fallen then won’t you need less to buy another car that is similar age/spec to your current one?

GAP insurance covers the difference between the value of the car and what you owe on finance. Which could be a few grand. So falling car values potentially increase that ‘gap’. Especially if the finance has only been going a short time. Towards the end of your finance term it’s less of an issue. The finance would need to be cleared on a written off car as that is what the finance is against.

i was going to recommend Click4Gap but I see they’ve pulled out of the market due to this new ruling.