Good GAP insurance recommendations?
Discussion
Calza said:
Which is exactly what happens if you hand the car back half way through a lot of the time.
They take the car back and charge you the remaining payments too.
You wouldn't take the car back unless you worked out some deal with them. Every lease agreement I've ever been involved in, and I'm talking hundreds over the years at work, has a clause that says in the event of the car being written off / stolen or whatever, they get the market value of the car to terminate the lease.They take the car back and charge you the remaining payments too.
TwigtheWonderkid said:
Claudia Skies said:
GAP = "depreciation insurance". But it only pays out if you lose the car. Seems an illogical purchase to me, because the car depreciates whether you keep it or lose it.
True, but you might be planning to absorb the depreciation over many years. Depreciation isn't linear, you get more of it in the early days/years after purchase. It insurers you against having to face the depreciation earlier than you wanted to. If your 9 month old car is written off you get the value of a 9 month old car from your car insurance and buy a 9 month old car with it - so you're in exactly the same position you expected to be in. I can't see any "loss" to insure.
IMO GAP insurance is simply a form of gambling. I can't see any value in it.
If the car is on finance you don't get anything from the insurance company, as they will settle the finance directly. If the market value is less than you owe, you need to come up with the difference to settle the balance of the finance before you can do anything about replacing the car.
These are the main points in my T&C's:
6.4 We shall be entitled to collect any insurance monies from your insurers and where necessary we may, but will not be obliged to,
negotiate and effect a settlement with the insurers which will be binding on you.
6.5 If the Vehicle is stolen or declared a total loss you must notify us and your insurance company straight away and make a claim against
your policy of insurance for the full retail replacement value of the Vehicle without deduction. You shall continue to pay Rentals until the
full retail replacement value of the Vehicle is received by us and upon receipt this Agreement will terminate and any further sums due
under paragraph 13 shall also be payable.
13 Your liability following termination/repudiation
13.1 If this Agreement ends under paragraph 12 you must pay to us straight away:
13.1.1 all Rentals and other sums which are due but you have not paid as at the date of termination or ending of the Agreement; and
13.1.2 any reasonable administration costs and expenses incurred as a result of you breaking this Agreement; and
13.1.3 as agreed liquidated damages a sum equal to the Rentals which but for termination would have become payable during the
remainder of the Term discounted at the rate of 4% per annum from the date this Agreement is ended to the dates on which the
relevant Rentals would otherwise have fallen due; or in the alternative
13.1.4 damages calculated as a reasonable pre-estimate of our losses resulting from the termination of this Agreement.
6.4 We shall be entitled to collect any insurance monies from your insurers and where necessary we may, but will not be obliged to,
negotiate and effect a settlement with the insurers which will be binding on you.
6.5 If the Vehicle is stolen or declared a total loss you must notify us and your insurance company straight away and make a claim against
your policy of insurance for the full retail replacement value of the Vehicle without deduction. You shall continue to pay Rentals until the
full retail replacement value of the Vehicle is received by us and upon receipt this Agreement will terminate and any further sums due
under paragraph 13 shall also be payable.
13 Your liability following termination/repudiation
13.1 If this Agreement ends under paragraph 12 you must pay to us straight away:
13.1.1 all Rentals and other sums which are due but you have not paid as at the date of termination or ending of the Agreement; and
13.1.2 any reasonable administration costs and expenses incurred as a result of you breaking this Agreement; and
13.1.3 as agreed liquidated damages a sum equal to the Rentals which but for termination would have become payable during the
remainder of the Term discounted at the rate of 4% per annum from the date this Agreement is ended to the dates on which the
relevant Rentals would otherwise have fallen due; or in the alternative
13.1.4 damages calculated as a reasonable pre-estimate of our losses resulting from the termination of this Agreement.
TwigtheWonderkid said:
If the car is on finance you don't get anything from the insurance company, as they will settle the finance directly. If the market value is less than you owe, you need to come up with the difference to settle the balance of the finance before you can do anything about replacing the car.
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