GAP Insurance for lease cars?

[a311]

I’ve never owned a car that was worth more than a few grand but in the next few weeks I’ll be taking delivery of a new car that I’ll be leasing.

They’ve sent me a quote through for GAP insurance which is something I’ve had no experience of. The lease is for two years, what I guess the GAP protects me from is a scenario where I have a fault accident and if the car was written off the GAP would cover the difference from what the car was new and what it may be worth after 12 months or so? The cost is £240 so I’m just wondering if is necessary or standard insurance (fully comp) will cover it?

Would be good to hear from other car leasers.

Cheers

[dapearson]

a311 said:

I’ve never owned a car that was worth more than a few grand but in the next few weeks I’ll be taking delivery of a new car that I’ll be leasing.

They’ve sent me a quote through for GAP insurance which is something I’ve had no experience of. The lease is for two years, what I guess the GAP protects me from is a scenario where I have a fault accident and if the car was written off the GAP would cover the difference from what the car was new and what it may be worth after 12 months or so? The cost is £240 so I’m just wondering if is necessary or standard insurance (fully comp) will cover it?

Would be good to hear from other car leasers.

Cheers

I need to sort this out for myself next week.

Fully comp insurance will only pay out the market rate for your car at the time. This might not be enough to cover the outstanding amount on your lease/finance.

Try http://www.ala.co.uk/

[a311]

dapearson said:

I need to sort this out for myself next week.

Fully comp insurance will only pay out the market rate for your car at the time. This might not be enough to cover the outstanding amount on your lease/finance.

Try http://www.ala.co.uk/

Cheers, it's worth it for peice of mind. Was going to call my own insurer to see what the small print is as something springs to mind where in the first year on a brand new car the payout is for purchase price?

[P-Jay]

It's a good product especially when you're working with a small deposit.

However it's worth noting that some insurance companies will replace a sub year old car on a like-for-like basis if it's written off and it may be the case that your repayments have caught up the depreciation curve by then - but for £240 it's probably not worth the risk.

[wemorgan]

IMHO there is no need for GAP insurance on a 2 year lease. If written-off the value of the car is clearly known by the value of stock held at the main dealers, who will own 99% of 1-2 year old cars. The insurance company will settle with the finance company for the full amount.

GAP insurance is of greater worth if a car is bought with a loan and the value of the loan reduces by a slower amount than the car's value.

[dapearson]

wemorgan said:

IMHO there is no need for GAP insurance on a 2 year lease. If written-off the value of the car is clearly known by the value of stock held at the main dealers, who will own 99% of 1-2 year old cars. The insurance company will settle with the finance company for the full amount.

GAP insurance is of greater worth if a car is bought with a loan and the value of the loan reduces by a slower amount than the car's value.

That might well be true. It's £119 for £20k of cover from that company i linked to earlier. Not worth worrying about TBH.

[Pickled Piper]

a311 said:

dapearson said:

I need to sort this out for myself next week.

Fully comp insurance will only pay out the market rate for your car at the time. This might not be enough to cover the outstanding amount on your lease/finance.

Try http://www.ala.co.uk/

Cheers, it's worth it for peice of mind. Was going to call my own insurer to see what the small print is as something springs to mind where in the first year on a brand new car the payout is for purchase price?

Yes, check your insurance details. Some companies will cover you for the invoice cost of the vehicle if it is less that 12 months old. This effectively negates the need for GAP insurance until year 2 and beyond.

pp