How Much Does Car GAP Insurance Cost in the UK?

GAP insurance acts as a safety net for car owners in the UK.

When a car is written off or stolen, there's often a difference between the amount covered by the insurer. and what you owe on the vehicle.

That's where GAP insurance for cars steps in, covering the 'gap' between these amounts.

Before deciding whether this type of insurance is right for you, understanding the basics, including the average GAP insurance cost, is essential.

To help you make an informed decision, we’ve put together this in-depth guide revealing the full costs of GAP insurance to consider 😀

What Is Gap Insurance for Cars

Guaranteed Asset Protection (GAP) insurance pays the difference between the value of the car, and what the insurer will pay out.

Your insurance company will only reimburse you for your vehicle's current market value.

This is likely going to be significantly less than what you originally paid for the car due to depreciation. Discover more about new car depreciation

So, with GAP insurance, you can buy a replacement car for the same value as your previous one.

How Does Gap Insurance Work in the UK?

The way GAP insurance works will depend upon who you took out the policy with. If you have a different GAP insurer to your standard car insurance, follow these steps:

Step 1: If you are in an accident and your car is damaged beyond repair, call your insurer to have it declared a total loss.

Step 2: Next, you’ll need to contact your GAP insurer before accepting any payment quoted by your car insurer.

Step 3: Sign and return the forms they send you if you are satisfied with the terms of the agreement. If you're unhappy, you should voice your concerns to the insurer.

Be ready to submit any necessary supporting documentation, such as your MOT certificate.

Gap Insurance Coverage Explained

At its core, car GAP insurance UK pays the difference between a car's market value and its original purchase price. However, like a car finance plan, there are different levels of coverage available including:

Return to Invoice (RTI): This coverage pays the difference between the insurance pay-out and the vehicle's original purchase price.

It ensures you'll get the same amount you paid for the old car to purchase a new one.

Return to Value (RTV): RTV cover pays the difference between the insurance pay-out and the car's value when you took out the GAP policy.

Vehicle Replacement: If you want to buy the same make and model as your old car, vehicle replacement cover is ideal.

It pays the difference between the insurance pay-out and the cost of buying a new car of the same make, model, and specification.

Finance GAP: This focuses strictly on the outstanding finance on the car. If there's a 'gap' between the car's current value and the finance you owe, this coverage ensures you don't end up out of pocket.

Compare gap insurance policies to see which one best fits your needs.

Factors Affecting Gap Insurance Cost

Several factors determine the GAP insurance cost you’ll need to pay, including:

  • Vehicle cost
  • Depreciation rate
  • Specifics of the finance agreement
  • Your credit rating

Longer loan terms or higher interest rates can increase the potential 'gap', impacting the premium you need to pay.

Certain models may also carry higher premiums due to theft rates or repair costs.

Comparing Gap Insurance Options

Like car finance options, not all GAP insurance policies in the UK are created equal. Some might be better suited to your specific needs and budget than others.

When comparing GAP insurance options, consider factors such as the policy's coverage limits and duration. Also look out for anything that isn’t included.

Always ensure that you're comparing like-for-like policies to get a true sense of their value and suitability.

Armed with the right knowledge, you can secure the best car GAP insurance UK providers have to offer.

While it may not be for everyone, this insurance can provide a lifeline if your car is written off.

Need finance for your new vehicle? Discover how Carmoola works and get the finance you need on the same day you apply.😍

Read more about GAP insurance:

FAQs About Gap Insurance Costs:

Is Gap insurance necessary for all cars in the UK?

GAP insurance isn't mandatory for all cars in the UK. It's an optional extra that many choose for peace of mind, especially if they've bought a brand-new car or have a finance deal.

What does Gap insurance cover, and what does it not cover?

GAP insurance covers the difference between the current market value of a car and the amount you originally paid or the outstanding finance. It doesn't usually cover deductibles, missed payments, or any add-ons like extended warranties. Always check individual policies for specifics.

Can I purchase Gap insurance at any time, or does it need to be added when buying a car?

While many people opt for GAP insurance when buying a car, it's possible to purchase it later. However, there might be restrictions depending on the car's age or how long you've owned it.

Is Gap insurance the same as regular car insurance?

Regular car insurance covers damages or theft up to the car's current market value. GAP insurance, on the other hand, covers the 'gap' between this value and the original price or outstanding finance.

How Can I Get Gap Insurance at a Lower Cost?

To secure GAP insurance at a lower cost, shop around and compare deals. Also, considering a higher deductible or bundling it with your standard car insurance might get you a discount.