RTI, Finance GAP or Lease GAP: Which Type Do You Need?

Most people researching GAP insurance start by asking whether they need it. The more useful question, once you have decided you do, is which type. There are three, they behave differently, and the right one depends entirely on how you paid for the vehicle.

All three exist for the same reason. If your car is written off or stolen, your motor insurer settles at the vehicle’s market value on the day of the loss. That figure is rarely what you paid, and it has no relationship to what you might still owe.

Return to Invoice

Return to Invoice, usually shortened to RTI, pays the difference between your motor insurer’s settlement and the price on your original invoice.

It suits anyone who bought outright or on finance and whose main concern is being put back to where they started rather than simply clearing a debt. If you paid a substantial deposit, RTI is the type that recognises it, because the deposit formed part of the invoice price.

Finance GAP

Finance GAP pays the difference between the motor insurer’s settlement and the amount outstanding on your finance agreement at the point of total loss.

The distinction matters. Finance GAP is designed to clear what you owe, not to return what you paid. On an agreement where the balance has fallen below the vehicle’s value, there may be no shortfall to cover at all. Where negative equity has built up, particularly early in a long agreement or on a PCP, it is the type that addresses it directly.

Lease GAP

Lease GAP is for contract hire and personal leasing, where you never own the vehicle.

A total loss on a lease usually triggers an early termination charge from the leasing company, and the motor insurer’s settlement may not cover it. Lease GAP is built around that charge rather than around a purchase price or a finance balance.

Working out which applies

Three questions will normally settle it. How did you pay: cash, finance, or a lease? If the car were written off tomorrow, would you be more concerned about replacing it or about what you still owe? And does the vehicle meet the eligibility criteria, which for our policies means being up to ten years old, with you as the registered keeper and the policyholder on the main motor insurance.

GAP insurance is not right for everyone, and whether it is worthwhile depends on your circumstances, how you funded the vehicle and how much you would stand to lose.

If you would like to talk it through before you buy, call us on 0161 388 2550 or email sales@gapinsurancetoday.co.uk.