Query - Non fault accident, finance nightmare

[R32]

I thought you couldn't buy GAP insurance any more, that the government had put a pause on it being sold due to the poor value for money it gives?

If so, what do you do in this situation to cover the 'gap'?

[Davie_GLA]

R32 said:

I thought you couldn't buy GAP insurance any more, that the government had put a pause on it being sold due to the poor value for money it gives?

If so, what do you do in this situation to cover the 'gap'?

This was their understanding too. They claim that the salesman at the time mentioned it as part of the usual after care stuff but that there were some conflicting views about its value. Who knows.

In this particular situation they hope that the payout will clear the finance and put them back in a position to start again but that doesn't sound like how insurance would cover their losses. I dunno. They are OK and just have a few bruises and I guess that’s the main thing.

[Sheepshanks]

nikaiyo2 said:

The payout ratio is low as not that many people write their cars off, so not many claim. For the cost its insane to not have it.

You say that, but the FCA seem to think that it's so poor value for money that they've close to banned the sale of it.

https://www.fca.org.uk/news/press-releases/gap-ins...

[Sheepshanks]

R32 said:

I thought you couldn't buy GAP insurance any more, that the government had put a pause on it being sold due to the poor value for money it gives?

If so, what do you do in this situation to cover the 'gap'?

You can stil get it from a few suppliers - I think ALA are still selling it. They pretty well stopped garages selling it some time ago as that really was a rip-off.

[Yellow Lizud]

nikaiyo2 said:

The payout ratio is low as not that many people write their cars off, so not many claim. For the cost its insane to not have it.

Exactly this.

Not suitable for everyone but for anyone who buys a new or newish car with a rapid depreciation value or ongoing financial commitments, I would suggest GAP insurance is essential, not a legal requirement but definitely worth it for piece of mind.
GAP insurance certainly has not been banned, nor likely to be in the near future. It is the way it is sold that is being looked into. Just make sure you don't buy it from the same company that is selling the finance deal and go direct to an insurance company. A Quick search on Google will show you that nearly all the major insurance companies will sell stand alone GAP insurance policies.

I think more people need to be informed about what GAP insurance actually is, how it works and if they need it.

[Hol]

nikaiyo2 said:

The payout ratio is low as not that many people write their cars off, so not many claim. For the cost its insane to not have it.

A really good mate wrote of his Maserati Ghilibi when it was 2.5 years old, it was worth about 50% of what he paid for it, his GAP paid out something mad like £39K, the difference between invoice and insurance settlement.

Out of interest, was that Ghibli new car, or old car?


(And before some desperate points scorer stumbles on this thread and demands to know why I have insisting there is a difference etc etc, I haven’t. I simply asked if it was new or old out of interest)

[Hol]

Sheepshanks said:

R32 said:

I thought you couldn't buy GAP insurance any more, that the government had put a pause on it being sold due to the poor value for money it gives?

If so, what do you do in this situation to cover the 'gap'?

You can stil get it from a few suppliers - I think ALA are still selling it. They pretty well stopped garages selling it some time ago as that really was a rip-off.

Yup, dealer supplied gap was inflated. For all my new cars with any finance, I have bought GAP from specialists like ALA for half or, less.

[Forester1965]

Gap insurance can be invaluable. A car of mine was stolen at 18 months old on PCP and the hole between valuation and outstanding finance was £9k. I'd used ALA to buy £179 worth of cover for new replacement invoice value (as in it also covered increases in list price for a new one rather than just the invoice value of my old one).

In the end I was £15k in cash up on the deal.