What is GAP insurance? Do I need it? How much does it cost? Don’t panic! If you have any questions over GAP insurance and whether it’s right for you, here’s everything you need to know when considering taking out a policy.
What is GAP insurance?
We all know car insurance is a legal requirement, and the policy we take out, amongst other things, covers our vehicle against unfortunate incidents such as accidents, fire and theft. However, if your car is considered a total loss (where the insurance company decide to write off your vehicle) your insurance policy will usually only pay out the current market value of the vehicle – not the value you paid for it originally, nor the outstanding balance of any finance you still owe.
GAP Insurance or Guaranteed Asset Protection Insurance is designed as a top up to your fully comprehensive insurance policy, to ensure you’re never left out of pocket.
So what exactly does it cover?
The GAP Insurance CarFinance247 provides incorporates Return to Invoice (RTI) with Finance GAP.
Return to Invoice (RTI) GAP
If your vehicle is written off by your motor insurer, RTI GAP is designed to cover any difference between the market value of your vehicle at the time of the write off and the amount you initially paid for the vehicle (The net invoice price). In other words, your motor insurer will only pay you what your vehicle is worth at the time of the write off, whereas if you have RTI GAP it tops up the insurance pay-out so you receive the full price back that you paid for your vehicle at the start. This helps to protect any money you have invested in the vehicle, such as a deposit and/or any part exchange value.
If your vehicle is written off by your motor insurer, Finance GAP is designed to cover any difference between the market value of your vehicle at the time of the write off and the amount you still owe on your finance agreement. In other words, without GAP, if the motor insurer pays out less than you still owe the finance company, you would be responsible for paying the finance company the remaining balance.
Combined GAP/RTI Insurance
The GAP insurance we provide here at CarFinance247, is a combination of these two policies. It will return you to the invoice price that you paid for the vehicle, however if the finance settlement happened to be more than the original purchase price of your vehicle, then the policy gives you the extra money needed to pay off any outstanding finance. Effectively it pays out the higher amount of the two policies described above, whichever gives you the biggest pay-out.
Can CarFinance 247 arrange GAP insurance for me?
Yes, we provide a combined GAP insurance policy covering both RTI and Finance GAP insurance. This policy will top up your motor insurance settlement to match either the original price you paid for the vehicle or the outstanding balance on your finance agreement – whichever is higher.
What is covered?
Cover is only available through Carfinance247 for a 3 year period. Cover ends earlier in the event of a valid claim, if the vehicle is no longer in your possession or if you cancel the cover.
The maximum claim limit will vary dependant on the vehicles age, value and purpose of use. The claim limit is always set at a suitable depreciation level over a 3 year period for your vehicle. For further details on what claim limit would apply, please ask one of our friendly Insurance Advisors.
During the policy term, if you replace your vehicle you may transfer any remaining period of insurance to your new vehicle, on payment of an administration fee of £35. This is providing you transfer the cover within 7 days of purchasing your replacement vehicle, subject to that vehicle being within the price range specified in your policy schedule. However, if during the first year of cover, the vehicle is written off and you get a replacement vehicle on a “new for old” basis, you can transfer the remaining duration of the policy to your replacement vehicle free of charge.
You can cancel your policy for any reason at any time, providing no claim has been registered with the insurer. If you cancel within 30 days of purchasing the cover, we’ll give you a full refund of any money paid. If you wish to cancel after 30 days, you will be entitled to a pro-rata refund which will reflect the length of the term remaining (subject to a £35 administration fee). Feel free to contact us regarding cancellation at any time.
Contributes up to £250 towards your motor insurance excess in the event of a valid GAP claim (Up to £500 when purchasing Motorbike GAP insurance).
As long as accessories are fitted by the dealer and are manufacturer approved, we will cover up to £1500 of extras. Manufacturer fitted accessories are covered.
The cost of a vehicle warranty and a £100 contribution towards a road fund licence is covered on a valid GAP claim, provided it is purchased with the vehicle and is detailed on the original vehicle supply invoice.
Simple to Arrange
Your Insurance Advisor will be happy to answer any questions you may have and confirm your eligibility.
IMPORTANT: GAP Insurance is subject to terms and conditions. You should note that there are certain limitations in terms of the maximum amount you may claim.
What is not covered?
As with all insurance policies there are some circumstances for which GAP Insurance will unfortunately not cover you.
Importantly Throughout the period of the GAP Insurance you must have a fully comprehensive motor insurance policy issued by an authorised UK motor insurer, which insures against accidental loss and or damage.In the event your motor insurer rejects your claim and a settlement payment is not made to you, this policy will be void and you will not be covered.
We are unable to cover all vehicles and situations. You will be excluded from the benefits of this policy if:
- The vehicle has been modified in any way from the manufacturer’s specification.
- The vehicle will be used for a competitive event.
- The vehicle is heavier than 3500kg gross weight.
- The vehicle is one of these makes:
Aston Martin, Bentley, Bristol, Bugatti, Cosworth, De Tomaso, Dorchester, Ferrari, Ginetta, Hummer, Honda NSX models, Lamborghini, Lancia Thema, Lotus, Maserati, Maybach, Mitsubishi 3000GT, Marcos, Noble, Rolls Royce, TVR and kit cars. (Premium GAP cover may be taken out for certain prestige vehicles listed above, please speak to your Insurance Advisor for further details)
- Any total loss is due to your negligence or deliberate action.
- Any total loss is as a result of an accident where the driver of the vehicle is under the influence of alcohol, drugs not prescribed by a registered medical practitioner, or drugs prescribed by a registered medical practitioner where a warning against driving has been given.
Additional costs within the finance settlement for anything other than the purchase of the vehicle are not included under the GAP insurance. This includes but is not limited to; motor insurance, payment protection, recovery, administration charges, option to purchase fees, late payment charges, arrears and early settlement charges. This exclusion does not extend to those items listed above in the ‘Additional Protection’ section.
This refers to any sum outstanding from a previous vehicle finance agreement, transferred to the new vehicle finance agreement. Where there is negative equity included within the finance settlement, any negative equity will be deducted from the claim settlement figure.
Any recoverable Value Added Tax (VAT) where you are VAT registered is not covered.
For full benefits and exclusions, please refer to sections titled ‘What is covered?’ and ‘What is not covered?’ of the policy terms and conditions which will be provided on request.
How easy is it to purchase GAP?
Setting up GAP insurance is simple. You will have the option to arrange GAP insurance within the first 90 days after the purchase of your new vehicle.
There are two ways in which you can pay for this policy. A single one off payment can be made or you can spread the cost over 12 instalments at a fixed rate of APR of 17.9%..
How much does it cost?
The cost of GAP insurance naturally varies dependent on the price you have paid for your vehicle, its age and the purpose of use.