Gap Insurance

[Mad Mart]

I now know what gap insurance is but I was just wondering if anyone on the forum has taken out a policy and with whom? Any pitfalls you know of?

Sounds like a good plan.

[SprintMWU773V]

I used to sell cars and of course we were encouraged to sell gap insurance. I've met a number of customers who've benefitted from it and I've bought it for the last 2 cars I have bought. Just check to see the level of cover. One policy I had would cover the whole purchase price of the car in the event of it being written off whereas others may literally cover the 'gap' which ensures you don't lose out financially but then you don't get anything extra to help you buy another car. The cost difference in my case was minimal. Generally I find that the manufacturer finance versions are better for the customer i.e. the BMW finance one was better than the one the dealer offers that's their own version or one from a third party, there's also generally less quibble in the event of a claim.

[Mad Mart]

The policies we are looking at are "Return to Invoice" so the main insurance company pays the market value of the vehicle and the gap insurers pays the difference between that and the purchase cost. We only found out about these policies whilst purchasing Mary's new car on Saturday. I think it is a no-brainer seeing how much a new car will depreciate over the first few years.

[SprintMWU773V]

Sounds perfect. A lot of policies only cover the difference between 'market value' and what the insurer offers. The policy you describe would seem like the best to go for as it'll allow you to pay off any finance and then still have money left over to put down on another car should it get written off.

Gap is the only thing I would ever take out when buying a new car. I would be inclined to pay it up front too if you can to save paying interest for 3 or 4 years.

[mbellinger]

I am completely cynical about these policies and regard them as a total waste of money.

In the event of a claim, the insurers will do literally anything to avoid paying out, and when (if) they do eventually do so, there are numerous unforseen deductions. I have direct personal experience (a six month old vehicle stolen and never recovered) and my family have two additional experiences, all with different providors, and all bought with new cars from main dealers at the point of purchase.

I cannot say more on here because one case ended litigiously and is bound by a confidentiality agreement after legal action the insurer. Regular readers will know that I am no stranger to this.....

You would be better taking the money down the end of the garden and setting light to it.

[killysprint]

Have to say I've got gap insurance on our daily's.

Expensive from the dealers- yes. Give them a poke and tell them you'll buy it elsewhere and they generally yield. As others have said make sure it's return to invoice price cover.

I haven't had to claim personally, but my business partner had a car damaged by the floods just before Xmas last year, which fortunately was covered by gap insurance.
The car an audi s4 was bought new, and financed on a pcp arrangement. With options the car was around £45k - the gap insurance from the dealer he negotiated to £200. The car was his pride and joy, it was immaculate, and only had done around 10k miles. He's very careful with any of his cars. He's the type if he goes shopping at supermarket the car is parked in the far corner of the car park to avoid being marked or dented.

When the car was flooded it was just under 2 years old and immediately declared a insurance write off - his insurance company valued the car at £4500 under the settlement that was owed to the finance company. A good chunk in anybody's wallet.

As the car was immediately written off - all was settled with 4 weeks, both insurances paid out, the gap insurers paying also paying out the £4500 to the finance company and essentially almost 2 years of payments that he had made on the car back to him. Consequently he was left with a healthy deposit to allow him to step into a new car almost immediately. Needless to say with gap insurance.

My car bought earlier this year has gap - from the dealer - just in case.

[xvivalve]

The fact that gap insurance can be in any way justified, is one of the manifold reasons I will never buy another brand new car!

[Galileo]

The fact that gap insurance can be in any way justified, is one of the manifold reasons I will never buy another brand new car!

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