Gap insurance explained

[admin]

GAP coverage or GAP insurance, was established in the early 1980's to provide protection to consumers based upon buying and market trends.

Due to the sharp decline in value immediately following purchase, there is generally a period in which the amount owed on the car loan exceeds the value of the vehicle, which is called "upside-down" or negative equity. Thus, if the vehicle is totalled at this point, the owner will still owe money on the loan. The escalating price of cars, longer-term auto loans, and the increasing popularity of leasing gave birth to GAP protection. GAP waivers provide protection for consumers when a "gap" exists between the actual value of their vehicle and the amount of money owed to the bank or leasing company.

[justf1]

I came across this insurance when my dealer tried to sell me it. He wanted nearly £400 for a return to Invoice Policy.
I went on-line and then called www.Click4gap.co.uk who were so helpful and explained the differences clearly between 3 different policies. Apparently you can take out Gap Insurance on any car upto 7 years old and 80,000 miles... effectively freezing the value of the car!

As I had bought the car within the last 3 months (apparently the car does not have to be new), I was entitled to RTI Gap. My car cost me £15,000 and was new last summer. According to WhatCar depreciation guide (http://www.whatcar.co.uk/depreciation-index.aspx) the forecast market value in 3 years time was a little over £6,000. (the price my insurers would pay out on in the event of Theft or declared a "total loss" though an accident).

I took a 3 year policy with click4gap.co.uk with a £10,000 claim limit and saved over £220.
I have contacted them since with a few questions, and being owned by the underwriters they have been quick and accurate in their response.
Anyone thinking of protecting their investment in their car really should give them a call (020 8543 6014) or visit their website www.click4gap.co.uk

Does anyone know where I can buy a good used car warranty. My wife has a 3 year old Focus and its just about to come out of its Manufacturers warranty.

[cshaobu611573]

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[Mark McKov]

GAP insurance can provide valuable protection during the early years of your car's life if you have a loan or a lease. If a loss occurs, GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your loan or lease. Gap Insurance protects your vehicle lease or loan. Sometimes it will also pay your regular insurance deductible.

[homer5]

More and more people are now taking gap insurance because of the protection that if offers. However the market is still young and prices can be further reduced if we have more companies specialising in this field.

[Exchange and Mart]

Thanks this is really useful.

[aeu96159]

I've always been confused by gap insurance - thanks for the help

[kal2k]

There is a company that offers FREE GAP insurance, along with providing your car insurance.
The company is (I saved money) isavedmoney.co.uk/car_insurance.asp. Surprisingly they are really competitive along with being quite unique as well.

[calebdylan]

thanks this was very usefull to those who havnt heard about gap insurance,and the GAP insurance is very usefull to the newly bought vehicles if it is on loan or lease to get back the maximum amount of insurance amount.

[DaniP]

You can take GAP out on a car that is up to 6 years old, so 2001 you cant take it out.

Once you have bought a car, you have 90 days to add GAP onto it.

GAP covers the difference between what your insurance company pay out and what is left on the finance/lease.

RTI gives you the difference between what your insurance company pay out and what you paid for the car originally.

You can GAP on any type of lease, HP, finance lease, contract Hire

RTI can be taken on any finance apart from contract hire

Be careful with cheap policies as there could be clauses in their T&C's. They have to be regulated by the FSA. The underwriters shouldnt be an offshore company and double check that they will cover lease cars.