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.