GAP Insurance. What do I need? If any!
Discussion
Hi All,
Trying to figure out what kind of GAP insurance I need as there seems to be a couple of different kinds around.
Back story. I have a 2015 S3 on a HP for 2 years. Have about 50% Equity in it (£8k) cars worth £16k.
The car isn’t really depreciating. So il never be in “negative equity”.
If the car was written off, does the gap insurance pay the £8k owed to the Finance Company? Aka I’ve just made £8k? Or does it only work if I’m in negative equity?
Think I’m over complicating it! But any advice appreciated.
Trying to figure out what kind of GAP insurance I need as there seems to be a couple of different kinds around.
Back story. I have a 2015 S3 on a HP for 2 years. Have about 50% Equity in it (£8k) cars worth £16k.
The car isn’t really depreciating. So il never be in “negative equity”.
If the car was written off, does the gap insurance pay the £8k owed to the Finance Company? Aka I’ve just made £8k? Or does it only work if I’m in negative equity?
Think I’m over complicating it! But any advice appreciated.
I thought gap insurance was for the difference between what the insurance paid out and the amount you still owed on finance ?
Sounds like you dont need it? As if written off you wont owe more than £8k and the value of the car is worth more.
Sounds like you dont need it? As if written off you wont owe more than £8k and the value of the car is worth more.
Edited by tedblog on Monday 16th November 08:23
I got the back to invoice price GAP insurance on mine, so even if the car is only worth say 18k when totalled, I get back the difference between what my insurance pay out eg 17k and what I paid for it, which was about 24k after discounts etc. That was on a brand new Polo GTi though, don’t know if back to invoice GAP is available on used cars.
You can get back to invoice GAP insurance on secondhand cars. Things to bear in mind it has a limited term ie 3 years although I believe you can get slightly longer. Also the amount paid out might have a financial limit eg £10,000 depending on who you go with.
Well worth it from an additional piece of mind and eliminates all of the hassle of insurance valuations in the unfortunate event of a write off.
Best to sort it out privately as dealers make a lot if commission on selling it. I paid just over £100 for £10k of cover using a company off the Honest John website. Note they do not cover your insurance excess
Well worth it from an additional piece of mind and eliminates all of the hassle of insurance valuations in the unfortunate event of a write off.
Best to sort it out privately as dealers make a lot if commission on selling it. I paid just over £100 for £10k of cover using a company off the Honest John website. Note they do not cover your insurance excess
CJ1 said:
The car isn’t really depreciating. So il never be in “negative equity”.
If you're confident that's correct then you don't need GAP, as it literally just covers the gap and you won't have one.The only time you could make money, like the £8K you mentioned, would be to get RTI GAP on a car you paid £16K cash for and then it gets written off and you only get £8K for it. Then, providing you had a suitable level of cover, the GAP company would give you £8K. However if you'd got the car on an awful finance deal and were £4K in negative equity, they'd settle the finance and you'd only get £4K.
PH has a GAP sponsor - ALA. But they offer a bigger discount though MSE. https://www.pistonheads.com/gassing/topic.asp?h=0&...
TwigtheWonderkid said:
Sheepshanks said:
If you're confident that's correct then you don't need GAP, as it literally just cover the gap and you won't have one.
GAP isn't called GAP because it covers the gap. It stands for Guaranteed Asset Protection. What someone did was find a few vaguely suitable words to fit the acronym.
Edited by Sheepshanks on Monday 16th November 11:31
Griff74 said:
I got the back to invoice price GAP insurance on mine, so even if the car is only worth say 18k when totalled, I get back the difference between what my insurance pay out eg 17k and what I paid for it, which was about 24k after discounts etc. That was on a brand new Polo GTi though, don’t know if back to invoice GAP is available on used cars.
I know of several people who have invoice price GAP insurance.They use the car for 2.5 years, then have a "crash" , it's written off as a Cat N/S, they get their full invoice price of the car back, they buy the salvage, fix it cheaply and continue to use the car. Then they also have the car they can sell at <70% of normal retail value.
Wouldn't do it myself but I guess they're playing the system so can't blame them. (aka committing fraud).
Sheepshanks said:
TwigtheWonderkid said:
Sheepshanks said:
If you're confident that's correct then you don't need GAP, as it literally just cover the gap and you won't have one.
GAP isn't called GAP because it covers the gap. It stands for Guaranteed Asset Protection. Edited by Sheepshanks on Monday 16th November 11:31
320d is all you need said:
I know of several people who have invoice price GAP insurance.
They use the car for 2.5 years, then have a "crash" , it's written off as a Cat N/S, they get their full invoice price of the car back,
I suggest you get to know better people. They use the car for 2.5 years, then have a "crash" , it's written off as a Cat N/S, they get their full invoice price of the car back,
Whilst RTI GAP makes fraud tempting, stats show it's very uncommon. Writing off a car in an accident isn't that easy to do on purpose, and can be dangerous.
If it was common, insurers wouldn't make any money at it so wouldn't offer the product.
TwigtheWonderkid said:
I suggest you get to know better people.
I judge people on their character 
Not whether they choose to commit a "victimless crime" (I know it isn't really, before you lecture me).
I don't suggest doing it. I'm just saying it can be a nicer earner if you're brazen enough.
PS It's not hard to crash yourself, just go down a country lane and into a bank.
Edited by 320d is all you need on Monday 16th November 12:35
TwigtheWonderkid said:
If it was common, insurers wouldn't make any money at it so wouldn't offer the product.
You might know this better, but I read the 'claims ratio'? on GAP is really low - it hardly ever get used so it's considered poor value for money. When you think about it, for the potential risk, the premiums now are buttons. It used to be a bit bonkers when it was mainly sold by dealers.Of course (not withstanding the obvious troll post) there will always the odd person who does well out of it. Anyone in the motor trade will no doubt know such a person.
Edited by Sheepshanks on Monday 16th November 14:09
Thanks all. I don’t think Gap insurance is necessary in my case. The car is 6 years old and depreciating £500/1000 a year at most with the low mileage I am doing. It’s HP and not a PCP and only 2 years.
I see how gap insurance works if you buy eg a new 7 Series for £80k and in a year it’s worth 40k. But just doesn’t appear to make sense on a car like mine.
I see how gap insurance works if you buy eg a new 7 Series for £80k and in a year it’s worth 40k. But just doesn’t appear to make sense on a car like mine.
CJ1 said:
Thanks all. I don’t think Gap insurance is necessary in my case. The car is 6 years old and depreciating £500/1000 a year at most with the low mileage I am doing. It’s HP and not a PCP and only 2 years.
I see how gap insurance works if you buy eg a new 7 Series for £80k and in a year it’s worth 40k. But just doesn’t appear to make sense on a car like mine.
I don't know what kind of cover or what it would cost on a 6yr old car, but bear in mind one thing that happens, compared to the £80K BMW that you mentioned, is that in a bump your car is much more likley to sustain enough damage to render it a write off, whereas it would take a lot ot write off the BeemerI see how gap insurance works if you buy eg a new 7 Series for £80k and in a year it’s worth 40k. But just doesn’t appear to make sense on a car like mine.
320d is all you need said:
I don't suggest doing it. I'm just saying it can be a nicer earner if you're brazen enough.
PS It's not hard to crash yourself, just go down a country lane and into a bank.
It's not hard to crash but it's a bit harder to crash to the right 'level'PS It's not hard to crash yourself, just go down a country lane and into a bank.
Don't crash enough and the car is not written off.
Crash too much and it's cat A or B (so can't be put back on the road).
I'm sure a few people try it but it doesn't seem a very good business plan to me!
Sheepshanks said:
TwigtheWonderkid said:
If it was common, insurers wouldn't make any money at it so wouldn't offer the product.
You might know this better, but I read the 'claims ratio'? on GAP is really low - it hardly ever get used so it's considered poor value for money. TwigtheWonderkid said:
Sheepshanks said:
TwigtheWonderkid said:
If it was common, insurers wouldn't make any money at it so wouldn't offer the product.
You might know this better, but I read the 'claims ratio'? on GAP is really low - it hardly ever get used so it's considered poor value for money. Gassing Station | Speed, Plod & the Law | Top of Page | What's New | My Stuff