GAP insurance, also known as GAP protection insurance is designed to protect you against the financial shortfall you may be left exposed to, in the event your vehicle or vehicles are subject to total loss, such as being written in an accident, vandalised or stolen. We have access to the best value quotes on the market, so don’t delay, get a great value quote today!
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According to the Direct Line Group, nearly 400,000 vehicles were written off in 2017, and around 70,000 vehicles were stolen or unrecovered. This leaves 1,000’s of hard-working drivers left picking up the pieces, disrupting their daily lives and leaving them severely out of pocket. This is because drivers who rely on a comprehensive policy will find that their insurer will only pay out on the current market value, which can be considerably less than what they paid.
How does GAP Protection Insurance work?
In a nutshell: GAP insurance will pay out the difference between the insurer’s payout and the outstanding finance amount, or, a 25% top up of the insurer’s payout, whichever is greater!
What if I own the vehicle outright?
No worries! The policy will simply payout an additional 25% of the insurer’s settlement amount! So if they payout £10,000, your GAP insurance policy will pay out an additional £2,500.
Let’s say you have spent £20,000 on a brand-new van. Maybe you have paid for the van yourself, or you have taken out a finance deal for this amount. You drive the van for 4 weeks and then you are involved in an accident and your van is written off.
Your insurance company may hand you a cheque for £15,000. Even though you had paid the dealer £20,000 for the van just 4 weeks ago, your insurance company takes into consideration the miles on the clock and estimates the vans actual value is now only £15,000. This leaves you £5,000 out of pocket, or, it leaves you £5,000 in debt (plus interest) with your insurance company, for a van you no longer own.
GAP insurance is designed to work alongside your standard van insurance – topping up the difference between what they will pay out, and what it will cost you to replace your van and get you back on the road. In this example, your GAP insurance policy could top up your payout by up to £5,000.
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So, is GAP insurance worth it?
GAP protection insurance is always recommended as vehicles age, accumulate miles and therefore depreciate and lose value. Unfortunately, this often happens in the early years of ownership. In fact, a vehicle can easily lose 30% of its value in the very first year. So, if you are to suffer from total loss, you could lose 30% of the money you paid for your vehicles within just 1 year! Worse still, 3 years of ownership can mean your vehicle is now worth less than half of the price you originally paid. GAP insurance, therefore, could be on the very best value policies you could buy.
Vehicle finance is also becoming increasingly popular. According to CarDealerMagazine, in 2017, 2.35 million vehicles were bought on finance. This trend does seem to be continuing as more people go self-employed and need a finance package to secure their commercial vehicles. Considering vehicles lose value, this often means that people end up in a position where the outstanding amount of their loan is larger than the value of their vehicle. This means that 1,000’s of motorist could find themselves still paying for vehicles they no longer own, unless they have a GAP insurance policy in place.
Who is GAP insurance for?
GAP protection insurance is ideal for anyone who owns a vehicle that has a considerable value or is less than 10 years old. We find some of the most prominent customers are;
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We compare and find the best insurance policy on the market, ensuring you get the very best cover for your needs, for the very best price. Contact our team today for more information, expert advice, or to get a quick quote.
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