GAP insurance is a product that could save you thousands of pounds. But do you know what it does?

Some may dismiss it as an unnecessary product and not think to purchase GAP insurance. However what they don’t realise is that it could one day help out financially in a way not many products can. There are three different types of GAP insurance on the market for both lease and owned vehicles:

 

  1. Finance GAP:  This is when you will receive the difference between the insurance pay-out to you and the cost of your finance settlement.
  2. Return to Invoice: The second part is Return to Invoice, where the difference between the pay-out received and the price you paid for the car is covered.
  3. Vehicle Replacement Insurance: The final part is Vehicle Replacement Insurance which covers the difference between the pay out to you and the cost of a similar vehicle at the point you first purchased it.

Our three Reasons to Purchase GAP Insurance

Still not convinced? We can give you three further reasons why GAP Insurance is a product that you should definitely consider:

1. Makes your investment 100% protected

When your vehicle is written off, your insurance will pay out a lump sum. But this sum will probably not be the total price that you originally paid for the vehicle as they will base it on the vehicles current ‘market value’.

But did you know a vehicle can lose 60% of its value in just the first 3 years.

GAP Insurance means that you will always get back all of the money you invested in your new vehicle. Similarly, in the unlikely case that your vehicle is more expensive at the time of the incident than when you purchased it, you can still get your investment back. Vehicle Replacement Insurance means that you will be given a like for like model to replace your vehicle.

2. Takes away the stress

Being in an accident, or having your vehicle stolen, is a very stressful time. This is without worrying about where the money will come from to replace your vehicle or pay off the rest of your lease contract. If you have GAP insurance and your vehicle is written off, you have no worries.

You know what your vehicle can, and will, be replaced.

3. Doesn’t matter how you paid for your vehicle.

Even if you paid cash for your vehicle, that’s no problem.

Return to Invoice or Vehicle Replacement Insurance will still cover your claim. Its only Finance gap that wouldn’t be applicable.

GAP insurance isn’t just for cars either. You can purchase it for vans, commercial vehicles, taxis and motorcycles too.

GAP Insurance example:

To make it easier for you to understand here is an example of how GAP insurance works:

A customer buys or finances a car for £15,000.00. After three years of ownership, the car is stolen and written off by the insurer. Insurer agrees to pay the depreciated value at time of write off which is £6,000.00. In this example, the customer would need to find £9,000.00 to be able to have the same amount of money to spend on a replacement. Return to Invoice GAP Insurance would pay that difference of £9,000.00 directly to the customer to enable them to spend £15,000.00 again on a replacement vehicle.

If you need details on what GAP insurance is, feel free to give us a call and we can help you through your quotation.