A Complete Guide to GAP Insurance for Cars
Guaranteed asset protection, otherwise known as GAP insurance, covers the shortfall for your car if it's declared a total loss or write-off by the insurance provider. The insurer pays out at the vehicle's market value, meaning that you'll probably receive less than the initial cost of the car. Even so, having some form of protection can be handy so you're not left without a vehicle or entirely out of pocket. If you want to know more about GAP insurance, then you've come to the right place. This guide has everything you need to know, from how much it costs to where you can get insured.
What is Car GAP Insurance?
GAP stands for guaranteed asset protection and typically sees insurance providers paying the current market value for a car in the event of a "total loss" claim. It compensates the difference (or the gap) between what your insurance company pays and what you'd have to pay out of pocket. Consequently, drivers aren't left entirely out of pocket if their car is written off due to a road accident.
Do I Need GAP Insurance?
Even if you're a meticulous driver who doesn't make any mistakes on the road, your car could still be in an accident that sees it written off by the insurance company. And collisions don't even need to be high-impact for a vehicle to be taken out of action – sometimes, it can be something relatively minor that causes the issue. Having GAP insurance can safeguard you against being out of pocket if your car is no longer road-worthy. While it's not mandatory, it can add extra protection for drivers. Before taking out any insurance policy or purchase, always shop around and look at every detail to ensure you're happy with the terms.
What Does Car Gap Insurance Cost?
GAP insurance costs vary depending on the type of car. Rates could be around £300 and increase depending on the price of the car – a more expensive vehicle will see you pay more for GAP insurance. You typically pay the cost of GAP insurance upfront rather than monthly payments. Never buy the first product offered by your dealership -it's good to compare offers to see who provides competitive GAP insurance options. A broker can help, searching the market on your behalf for the best available deals related to your requirements.
Where can I get Car GAP Insurance in the UK?
Several providers offer GAP insurance in the UK, and you might choose to use a broker to help you find the best deal. They'll take your requirements and budgets to try and source a suitable option for your needs. Alternatively, some companies offering GAP insurance include Totallossgap.co.uk, Gapinsurance.co.uk and Directgap.co.uk. So there are a few choices on the market should you wish to get this type of coverage for your car.
Is GAP insurance worth it on a used car?
Despite being commonly linked with new vehicles, probably because they depreciate so quickly, it's also possible to get GAP insurance on used cars. Drivers change their cars more frequently nowadays, and it's not uncommon for second-hand options on the market to cost thousands of pounds. Therefore, getting GAP insurance can ensure you receive some money back should your car be written off for any reason. Plus, used cars don't lose value as quickly as brand-new ones. A used car's value normally drops by only 25% in the same period of time as a new car, which has lost 60% of its value after three years.
Should I Get GAP Insurance for a Leased Car?
Yes, you can get GAP insurance for a leased car. It covers the difference between the car's value at the time of the write-off and the balance still owing on the lease if your leased vehicle is deemed a total loss. The financial company for your chosen leasing contract won't require you to get GAP insurance. But if you're concerned about being charged more for the vehicle in the worst-case scenario during your agreement, it can provide you with additional peace of mind.
How does car GAP insurance work if my car is stolen?
GAP insurance covers you if your vehicle is deemed a write-off, but what happens to stolen cars? If your car is stolen and no one can find it, then it will be declared a "total loss". In this case, your GAP insurance policy will payout. You will also receive a payout if the car is recovered but has suffered severe damage and is no longer roadworthy.