GAP Insurance worth it?

PiKe · 31 Dec 2019 at 14:33

After buying my car from Arnold Clark they strongly suggested I took out GAP insurance, I've never had GAP in the past, has anyone benefitted by having GAP insurance?

Mcnumpty2323 · 31 Dec 2019 at 14:41

Strongly suggest you take gap
Though it's an added expense
Imagine your car was in an accident and was a total write off
Your insurance would pay out value of your car but not any finance owed on it
So you could be thousands in debt

At least that's my understanding of it
The gap would clear the finance
Took gap on mine was only couple hundred quid for 3 years
Compared to the cost of the car that was a small amount
Guess how much the car is may be a factor whether to take gap or not though

BinnsY · 31 Dec 2019 at 14:46

It's worth having, but generally not worth having from the dealers. As mentoned it's designed to cover the difference between an insurance pay out for your car in the event of a total loss and what you actually paid for it. This wont be worth much in months 1-6 but if you buy a 3 year cover and someone writes your car off 2.5 years in it could benefit you thousands.

Do some shopping around and try some of the big companies online, there often cheaper than the dealer option. You might find you can even use these quotes to haggle the dealer down if you really do want to use theres as well.

Ahleckz · 31 Dec 2019 at 14:56

Arnold Clark will be selling you Vehicle Shortfall Insurance which is slightly different to GAP.

VSI - It'll pay the difference between your insurance settlement and the invoice price of the car.
GAP - It'll pay the difference between your insurance settlement and your financial settlement.

Example: Your car, which you paid £15,000 for with a finance settlement of £11,000 is written off and your insurance company give you £10,000. You have a £1,000 shortfall between car value and insurance payment. Without GAP/VSI you will have to cover that £1,000 yourself.

VSI will pay you £5,000 (£1,000 to cover the financial shortfall + £4,000 to return you to the invoice price)
GAP will pay you £1,000 to cover the financial shortfall.

Certainly shop around, but remember most places will be quoting GAP prices so you're not going to be comparing equal products.

BinnsY said:
Do some shopping around and try some of the big companies online, there often cheaper than the dealer option. You might find you can even use these quotes to haggle the dealer down if you really do want to use theres as well.

Arnold Clark won't adjust the price of their VSI, it's £9 a month for cars up to £15k iirc.

PiKe · 31 Dec 2019 at 17:26

Yes it's VSI, sorry didn't realise there were two different products.

I have 30 days from the purchase of the car to decide if I want to take the Arnold Clark product.

Drumroll · 31 Dec 2019 at 17:40

I rather have it than not. Also, shop directly with the providers, never paying 3x more at the dealer.

[TW]Fox · 31 Dec 2019 at 18:58

Mcnumpty2323 said:
Your insurance would pay out value of your car but not any finance owed on it

If your finance deal leaves you open to the possibility of this, you've made a bad decision signing up for it.

BUDFORCE · 31 Dec 2019 at 19:28

I think it's worth having.

I can't think of anything worse than having to pay back finance on something you dont even own anymore.

b0rn2sk8 · 31 Dec 2019 at 19:53

[TW]Fox said:
If your finance deal leaves you open to the possibility of this, you've made a bad decision signing up for it.

I don’t disagree for a used car but it doesn’t apply for a new one. As soon as you drive it off the lot it’s lost 15% but your finance is at the full cost.

[TW]Fox · 31 Dec 2019 at 20:29

b0rn2sk8 said:
I don’t disagree for a used car but it doesn’t apply for a new one. As soon as you drive it off the lot it’s lost 15% but your finance is at the full cost.

If you cannot rustle up a sensible deposit then are brand new cars sensible?

blueboy2001 · 31 Dec 2019 at 20:52

Never buy GAP insurance in whatever form from a dealer. It will often be an inferior product at a vastly inflated price.

GAP has a very low claims percentage - it’s very unlikely you’ll actually claim on it but buy it right and it’s not expensive. If you’re paying over £200 you’re probably paying too much.

I’ve had a couple of return to invoice policies from ALA - there’s always discount codes around. They do policies up to 48 months and the cover is transferable to another vehicle which is not the case with dealer policies. I paid just over £200 for £25k cover for 4 years.

Nasher · 31 Dec 2019 at 21:17

You can go up to 10 years and 100k miles as well. So even quite an "old" car being written off isn't as much of a worry.

BinnsY · 31 Dec 2019 at 22:16

Ahleckz said:
Arnold Clark will be selling you Vehicle Shortfall Insurance which is slightly different to GAP.

VSI - It'll pay the difference between your insurance settlement and the invoice price of the car.
GAP - It'll pay the difference between your insurance settlement and your financial settlement.

Example: Your car, which you paid £15,000 for with a finance settlement of £11,000 is written off and your insurance company give you £10,000. You have a £1,000 shortfall between car value and insurance payment. Without GAP/VSI you will have to cover that £1,000 yourself.

VSI will pay you £5,000 (£1,000 to cover the financial shortfall + £4,000 to return you to the invoice price)
GAP will pay you £1,000 to cover the financial shortfall.

Certainly shop around, but remember most places will be quoting GAP prices so you're not going to be comparing equal products.

Arnold Clark won't adjust the price of their VSI, it's £9 a month for cars up to £15k iirc.

This seems oddly confusing, is this just an arnold clark thing? The way you/arnold clark describe VSI insurance is exactly what my GAP insurance does and I'm sturggling to find much on google for VSI insurance other than the offering from Arnold Clark. I have no finance on my car as it was purchased out right. In my instance my GAP insurance covers the difference between the invoice price I paid for the car, and any settlement I get from an insurance company should it be written off. A quick look at admirals website also suggests they describe GAP insurance as covering the same thing as well with these specific quotes;

If you've just bought a car brand new, GAP insurance will pay the shortfall between the car’s value at the time you make the claim versus the amount you paid for the car.

When looking at a GAP claim, we consider the shortfall from the finance settlement and the gap from the invoice price - Admiral pays whichever is higher.

https://www.admiral.com/gap-insurance

With this in mind, to me it looks like what others call GAP insurance, will absouteley match watch Arnold Clark call VSI?

Ahleckz · 31 Dec 2019 at 22:29

BinnsY said:
This seems oddly confusing, is this just an arnold clark thing? The way you/arnold clark describe VSI insurance is exactly what my GAP insurance does and I'm sturggling to find much on google for VSI insurance other than the offering from Arnold Clark. I have no finance on my car as it was purchased out right. In my instance my GAP insurance covers the difference between the invoice price I paid for the car, and any settlement I get from an insurance company should it be written off. A quick look at admirals website also suggests they describe GAP insurance as covering the same thing as well with these specific quotes;

https://www.admiral.com/gap-insurance

With this in mind, to me it looks like what others call GAP insurance, will absouteley match watch Arnold Clark call VSI?

There are various types of GAP. I’m just explainim exactly what Arnold Clark offer.

Whilst your one may offer the same as Arnold Clark, not all do.

From the ala website:

What types of GAP Insurance are there?
Like all forms of insurance, there is a variety of options available, so it’s well worth knowing which is best suited to your exact needs. Don’t rush into agreeing any cover without knowing exactly what you’re going to need. Whilst you can’t have more than one GAP policy on one vehicle, a number of suppliers provide “combined” cover which gives you better coverage and the security that you desire.

Finance GAP Insurance: One of the simpler products available, this policy is often attached to other forms of coverage as part of a package. Designed to fulfil any outstanding finance repayments of a vehicle that’s been written off, it doesn’t tend to extend to payments concerning negative equity.

Negative Equity GAP Insurance: A more comprehensive offer compared to the Finance Gap Insurance, this policy will concern those whose loan amount is higher than the cost of their car. Occurring when somebody has part-exchanged a vehicle before the finance has been paid off – transferring the remaining amount on to their new deal – this insurance will cover that historical debt.

Return to Invoice GAP Insurance: Also known as Back to Invoice, this policy will bridge the gap between your car insurance pay out – which will fluctuate depending on the current value of the car at the time of the claim – and the amount you bought the vehicle for, which may prevent you from being left severely out of pocket. This can often be purchased combined with Finance GAP Insurance.

Vehicle Replacement GAP Insurance:This policy aims to provide the difference between your car insurance policy pay out and the cost of replacing your vehicle with a new one (if it was brand new originally). A good purchase for those who have received discounts or contributions from the dealer when purchasing their car, and are concerned that they may not receive the same level of discount for the same car following a write off.

Return to Value GAP Insurance: Not too dissimilar to the Invoice GAP Insurance option, and often called Agreed Value GAP Insurance, rather than provide the same sum that you originally paid for the vehicle, it pays out the difference between your car insurance settlement and the value of your vehicle at the time you purchased it. More of an option for those who’ve bought the car from a private seller rather than a garage or owned the vehicle for a long time.

Lease GAP Insurance: This is also known as Contract Hire GAP Insurance. If you have leased your vehicle rather than buying it, this will be the most appropriate option for your financial situation. Due to lease agreements having so many pre-determined repayments - which are usually required to be paid if the agreement is terminated early - these can prove incredibly expensive if something was to happen to the vehicle. Lease GAP Insurance aims to cover all of that worry, providing enough to satisfy any remaining repayments. With modern leasing, there is often a large deposit required at the start of the contract, and you can choose to protect this as part of your GAP insurance.

BinnsY · 31 Dec 2019 at 22:50

Ahleckz said:
There are various types of GAP. I’m just explainim exactly what Arnold Clark offer.

Whilst your one may offer the same as Arnold Clark, not all do.

That makes more sense. Ultimately though it really does look like it's Arnold Clark making things confusing by using a completely different term. It would seem that as long as the OP is getting quotes for "return to invoice" gap insurance he would be getting essentially the same cover as what Anrold Clark call VSI.

DereksDontRun · 31 Dec 2019 at 23:17

GAP is great, if required... But, the policies offered by the dealers tend to be more costly, so get a quote online.

The more the car is likely to depreciate the more relevent it is.

I had a brand new M135i, it got stolen a month before it was 3 years old. The insurance paid out £19k, which was £500 more than the finance settlement, so I effectively had £500 in my pocket to get a replacement car. But, then my GAP policy strutted in, and they paid the difference between the £19k insurance payout and car-wow's quote for the closest spec as I originally ordered (which was about 6k more than my original purchase price). So, GAP resulted in paying me MORE than the combined cost of 3 years PCP + my original deposit - so I was paid to drive for 3 years. I had a decent wad of cash to buy a replacement car (bought it outright, so no finance). Bought a 2yr old approved used car, and got my own GAP policy again - this time it will go back to my invoice quote, as it's a used car instead of new. Hopefully I won't need to use it again tho.

Ahleckz · 31 Dec 2019 at 23:42

BinnsY said:
That makes more sense. Ultimately though it really does look like it's Arnold Clark making things confusing by using a completely different term. It would seem that as long as the OP is getting quotes for "return to invoice" gap insurance he would be getting essentially the same cover as what Anrold Clark call VSI.

Agreed

PiKe · 1 Jan 2020 at 00:40

DereksDontRun said:
GAP is great...

Surely that's the best outcome scenario?

Is it likely to be worth it on a 66 plate Clio?

Conanius · 1 Jan 2020 at 11:03

I got my GAP policy through ALA with the PH discount. I went for Vehicle Replacement GAP Insurance because the level of discount I had would have left me with quite a shortfall to replace with a new model of equivalent spec.

I would imagine they are also cheaper than Arnold Clark.

Haggisman · 1 Jan 2020 at 11:31

[TW]Fox said:
If your finance deal leaves you open to the possibility of this, you've made a bad decision signing up for it.

Surely that's dependent on the deal itself. If you're getting a new car on 0% finance then wheres the sense in paying 10-20%+ up front when that money could otherwise be put to better use? Paying a bigger deposit in those circumstances doesn't benefit you at all.

Anyway, to answer the OP, I paid £250 for a 5 year vehicle replacement/return to invoice policy with Total Loss Gap, which will top up the insurance payout to the greater of the amount I paid or the cost to replace with a new vehicle.

Considering it's less than 1% of the cost of the vehicle, for me it was worth the peace of mind