GAP insurance pondering
Discussion
Sheepshanks said:
What's the source for saying GAP is taxed at 25%?
The higher rate seems to be 20%, and is only at that higher rate if insurance is sold by a "supplier of motor vehicles". I didn't know that. So GAP from (say) ALA is taxed at 12%, but buy it from a car dealership and it's taxed at 20%. Only partly explains their ridiculous markup, though!
https://www.gov.uk/government/publications/notice-...
Edited by silentbrown on Thursday 14th June 18:08
SteBrown91 said:
You need GAP for lease cars (many GAP providers do it) as in the event it is stolen or written off, the full market value of the car is owed to the lease company. If your insurance does not meet this the money will have to come from yourself. GAP would cover this in such an event
Thanks Ste perfectly summarised!silentbrown said:
maclarkk said:
If you don't think I should take out GAP insurance, even with a crash in mind, based on the fact that I'm only accountable for £9750... please give your reasons.
Ask ALA - they're usually helpful on here and offer a 12% PH discount. https://www.pistonheads.com/gassing/topic.asp?h=0&...They also have a specific product for lease cars. https://www.ala.co.uk/gap-insurance/contract-hire-...
I'd recommend you take GAP insurance. Your normal policy may offer as-new-replacement in the first year - BUT only if you're the registered keeper of the vehcile, which you won't be with a lease.
Not that GAP helps here, but always remember there are situations where you're accountable for the entire value of the vehicle if insurance won't pay out. (e.g drink-driving)
Will look at Ala when I get my quotes.
Can’t stand drink drivers! So hopefully won’t have any issues.
Cheers mate
Edited by maclarkk on Thursday 14th June 18:49
Sheepshanks said:
maclarkk said:
Now, off the top of my head, the car is actually worth £45k.
From a crashing it point-of-view, arguably the dearer the car the less likely it is to be written off.But it's an Audi S4 - so there's a good chance it'll get nicked. Get GAP.
You’re probably right about the theft thing even if it did make me laugh! Bloody thief’s these days love this type of car.
maclarkk said:
SteBrown91 said:
You need GAP for lease cars (many GAP providers do it) as in the event it is stolen or written off, the full market value of the car is owed to the lease company. If your insurance does not meet this the money will have to come from yourself. GAP would cover this in such an event
Thanks Ste perfectly summarised!Arguably, because of the higher value, there is less chance of a newish car being written off due to repair costs.
speedking31 said:
hat's the difference between a lease car and a private purchase using a bank loan? Surely the same argument applies no matter what the purchase mechanism?
Arguably, because of the higher value, there is less chance of a newish car being written off due to repair costs.
With a lease car you are effectively driving someone else's car on your own insurance.Arguably, because of the higher value, there is less chance of a newish car being written off due to repair costs.
If I arrange insurance to drive your car, which lets say you value at £20000 ( either arbitrarily or that's its written down value on your books ) , and I crash it and my insurance company pays out its market value of £15000, can you see how you might have a case against me for the other £5000, subject to the terms and conditions I signed in order to drive your car.
That's why you need GAP insurance ( at a competitive price of course ) on a lease car.
I think this may have been covered (I have not read the full thread!).....but please be aware that how you purchase the vehicle will determine:
1) If your insurers provide new car replacement within the first year - E.G most lease hire/contract hire deals would not qualify as the car would not be registered to you.
2) Make sure you check with GAP insurers about the registered keeper as some may not like it either.
RL
1) If your insurers provide new car replacement within the first year - E.G most lease hire/contract hire deals would not qualify as the car would not be registered to you.
2) Make sure you check with GAP insurers about the registered keeper as some may not like it either.
RL
Wooda80 said:
With a lease car you are effectively driving someone else's car on your own insurance.
If I arrange insurance to drive your car, which lets say you value at £20000 ( either arbitrarily or that's its written down value on your books ) , and I crash it and my insurance company pays out its market value of £15000, can you see how you might have a case against me for the other £5000, subject to the terms and conditions I signed in order to drive your car.
That's why you need GAP insurance ( at a competitive price of course ) on a lease car.
But if I'm driving my own car that I value at £20k on my own insurance and only get a £15k payout I still need GAP if I want to cover the £5k shortfall. The £5k I would be out of pocket is the £5k that I would have to pay the leaseco. I still don't see that there's any difference.If I arrange insurance to drive your car, which lets say you value at £20000 ( either arbitrarily or that's its written down value on your books ) , and I crash it and my insurance company pays out its market value of £15000, can you see how you might have a case against me for the other £5000, subject to the terms and conditions I signed in order to drive your car.
That's why you need GAP insurance ( at a competitive price of course ) on a lease car.
speedking31 said:
Wooda80 said:
With a lease car you are effectively driving someone else's car on your own insurance.
If I arrange insurance to drive your car, which lets say you value at £20000 ( either arbitrarily or that's its written down value on your books ) , and I crash it and my insurance company pays out its market value of £15000, can you see how you might have a case against me for the other £5000, subject to the terms and conditions I signed in order to drive your car.
That's why you need GAP insurance ( at a competitive price of course ) on a lease car.
But if I'm driving my own car that I value at £20k on my own insurance and only get a £15k payout I still need GAP if I want to cover the £5k shortfall. The £5k I would be out of pocket is the £5k that I would have to pay the leaseco. I still don't see that there's any difference.If I arrange insurance to drive your car, which lets say you value at £20000 ( either arbitrarily or that's its written down value on your books ) , and I crash it and my insurance company pays out its market value of £15000, can you see how you might have a case against me for the other £5000, subject to the terms and conditions I signed in order to drive your car.
That's why you need GAP insurance ( at a competitive price of course ) on a lease car.
Wooda80 said:
speedking31 said:
hat's the difference between a lease car and a private purchase using a bank loan? Surely the same argument applies no matter what the purchase mechanism?
Arguably, because of the higher value, there is less chance of a newish car being written off due to repair costs.
With a lease car you are effectively driving someone else's car on your own insurance.Arguably, because of the higher value, there is less chance of a newish car being written off due to repair costs.
If I arrange insurance to drive your car, which lets say you value at £20000 ( either arbitrarily or that's its written down value on your books ) , and I crash it and my insurance company pays out its market value of £15000, can you see how you might have a case against me for the other £5000, subject to the terms and conditions I signed in order to drive your car.
That's why you need GAP insurance ( at a competitive price of course ) on a lease car.
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