GAP insurers suspend sales
Discussion
Stick Legs said:
Mr Tidy said:
I don't push my budget to get a car I can barely afford, and don't plan to put it backwards into a hedge or ditch!
But depreciation is what happens in the real world so get used to it.
Flip side:But depreciation is what happens in the real world so get used to it.
I PCP’d a car I could otherwise afford outright.
Took out gap insurance via ALA direct at £150 for 3 years.
Some numpty runs into me & I get my invoice figure back, not the market value.
A win in anyone’s book surely.
Not everyone who PCP’s is a turkey teeth white Audi driving tattoed moron.
Some of us just saw stupidly low interest rates coupled with ambitious residuals that let us drive nearly new (in my case ex-demo 530d) cars for £260 a month.
If I could achieve that and end up quids in in the event of an insurance write off then that’s just prudence.
The chippiness on this site about those who ‘don’t buy outright’ is bonkers.
For the record I got fed up with the frankly w
k main dealer experience and now own outright a 2015 Range Rover, so clearly haven’t got 2 pennies to rub together.I have a paid-for Z4M Coupe for special days so have less pennies to rub together now, but good luck with your old RR.
FMOB said:
It only exists because standard insurers revert to trade values when a vehicle is a total loss rather than paying retail.
If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Objectively untrue. Very easy to be in negative equity. If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Edited by FMOB on Wednesday 15th May 21:37
FMOB said:
It only exists because standard insurers revert to trade values when a vehicle is a total loss rather than paying retail.
If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Utter nonsense. If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Edited by FMOB on Wednesday 15th May 21:37
There are loads of people out there who never buy 2nd hand cars. The just don't want to, they only want to buy new. They might keep the car for years, but eventually want to replace it with a new car. So when their car gets written off long before they were wanting to replace it, how are they going to bridge the gap between the insurance payout and the cost of a new one, without gap?
Then there are the people with finance agreements where they owe more money at a given point than the car is worth retail. What about them?
Forester1965 said:
GAP can be a great product. That's it's stopped is a mess. How are people going to avoid negative equity now?
It's absolutely crazy. The FCA are worried that it's too profitable for the insurers. So what? If it's sold at a price I'm happy to pay, and it's a good product, who cares? I don't mind anyone selling me any product and making a healthy profit in those circumstances. Most if not all car Insurers seem to offer a new car for the first 12 months of yours is written off or stolen and some apparently ( I’ve not seen any first hand ) , 24 months although I suspect these are rare.
Without GAP products , years 2 and 3 are an increased financial risk exposure.
Agreed valued insurance policies are an alternative but I suspect these will cost more than the respective GAP purchase.
In short banning GAP products doesn’t seem very customer fair.
Without GAP products , years 2 and 3 are an increased financial risk exposure.
Agreed valued insurance policies are an alternative but I suspect these will cost more than the respective GAP purchase.
In short banning GAP products doesn’t seem very customer fair.
Forester1965 said:
All they had to do was stop car sales people selling £150 policies for £400. People like ALA were/are providing a valuable service.
Absolutely. I’ve just rung ALA and they confirmed that they have been put in a pause mode.
However they also said they were cautiously optimistic that this would be lifted in the next few weeks to a month.
TwigtheWonderkid said:
It's absolutely crazy. The FCA are worried that it's too profitable for the insurers. So what? If it's sold at a price I'm happy to pay, and it's a good product, who cares? I don't mind anyone selling me any product and making a healthy profit in those circumstances.
Agree - you are paying to mitigate a (small?) risk and as long as you know what's covered and how much it costs, it seems a decision the buying public can safely make. If the dealer is upselling, then it's like any other insurance product and you should decide if you need it and shop around and see if their price is reasonable.I am surprised that there are only 6% claims as it would seem a product that is open to abuse by people deliberately writing their cars off a couple of weeks before the end of the GAP policy!
Chris
Edited by ScoobyChris on Thursday 16th May 11:51
The FCA seem to have failed to ask the first question that should have occurred to them, namely why does GAP insurance exist in the first place? This would lead them to car insurance and they would have much more to occupy their time and the minds than pursuing a really minor policy, that proportionately few people elect to buy.
Forester1965 said:
All they had to do was stop car sales people selling £150 policies for £400. People like ALA were/are providing a valuable service.
I've only ever bought it once. Audi offered it at £750, usual insurance broker was £250. Didn't know about the AA cover mentioned earlier, thanks.
Sticks. said:
I've only ever bought it once. Audi offered it at £750, usual insurance broker was £250.
Didn't know about the AA cover mentioned earlier, thanks.
Again, only bought once, £150 direct, dealer was £400.Didn't know about the AA cover mentioned earlier, thanks.
That was on the only new car I’ve ever bought, a Skoda Yeti. I joined the U.K. class action about dieselgate a couple of years after I sold it, and got £1700!
TwigtheWonderkid said:
FMOB said:
It only exists because standard insurers revert to trade values when a vehicle is a total loss rather than paying retail.
If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Utter nonsense. If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
There are loads of people out there who never buy 2nd hand cars. The just don't want to, they only want to buy new. They might keep the car for years, but eventually want to replace it with a new car. So when their car gets written off long before they were wanting to replace it, how are they going to bridge the gap between the insurance payout and the cost of a new one, without gap?
Then there are the people with finance agreements where they owe more money at a given point than the car is worth retail. What about them?
We've seen (blindingly obvious) effect on motor premiums of the price walking rules - the FCA seems to be completely stupid. Or, more likely, in league with car insurers.
Sheepshanks said:
TwigtheWonderkid said:
FMOB said:
It only exists because standard insurers revert to trade values when a vehicle is a total loss rather than paying retail.
If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
Utter nonsense. If insurers paid the true cost of a replacement vehicle gap insurance would be a solution looking for a problem.
There are loads of people out there who never buy 2nd hand cars. The just don't want to, they only want to buy new. They might keep the car for years, but eventually want to replace it with a new car. So when their car gets written off long before they were wanting to replace it, how are they going to bridge the gap between the insurance payout and the cost of a new one, without gap?
Then there are the people with finance agreements where they owe more money at a given point than the car is worth retail. What about them?
Forester1965 said:
All they had to do was stop car sales people selling £150 policies for £400. People like ALA were/are providing a valuable service.
Main dealers often sold gap insurance at a much higher price than the likes of ALA, but they offer a far superior service. For a start, the customer doesn't have to go online to buy the policy and the dealer does it all for them. Not everyone wants to by insurance products online. Then, in the event of the claim, the dealer will normally handle the claim for the customer. If a customer is happy to pay over the odds to reduce their own input or workload, that should be a choice open to them. Magikarp said:
The FCA seem to have failed to ask the first question that should have occurred to them, namely why does GAP insurance exist in the first place? This would lead them to car insurance and they would have much more to occupy their time and the minds than pursuing a really minor policy, that proportionately few people elect to buy.
Just not true. Gap insurance doesn't exist because of any failure of the motor insurance policy. It exists because people often owe more on their car than it's worth, or people want to be able to buy a brand new car when their 3 or 4 year old car gets written off, without paying out any more money over and above the insurance settlement. . TwigtheWonderkid said:
Just not true. Gap insurance doesn't exist because of any failure of the motor insurance policy. It exists because people often owe more on their car than it's worth.
Cars depreciate. It's as simple as that. Trying to insure depreciation is a nonsense concept that people simply don't understand but it all sounds lovely when described by the salesman in the shiny showroom. Huge commission, fat margins, low overall payout. Classic smoke and mirrors from sales people in the so-called financial services sector.
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