GAP insurance advice

[Pig benis]

Hi folks

Yesterday I picked up my new (to me) 58 plate Mini Cooper S and by far it is the best car I have owned, dare I say it, I prefer it to the drive of a company car Renault Sport Clio 200 that I had.

Now I have done the cardinal sin of PH and taken out finance on my new motor, which for my situation right now is perfect. I needed a car, a reliable one, I really don't like barges (sorry PH) and the great MX5 didn't quite fulfil my expectations.

So my question is - I didn't want to take out the ludicrously expensive GAP insurance from the Dick Lovett dealership, as I have heard about people paying half that with online GAP companies. However I am unsure of which one to go for?

I think I would like the 'return to invoice' deal, but again any advice on that would be great.

Thanks PH
One proud Mini Cooper S owner
PB

[northandy]

ALA seem to only get good reports, much much cheaper than a dealer too

[wemorgan]

I don't see GAP insurance as relevant for a second hand car. If you write off your car then the insurance company will pay out the full value of the car at the time of the accident.

GAP insurance becomes more relevant on new cars that depreciate faster than the finance repayments. Is that likely on finance on a 5 year old car?

[750turbo]

"Finance!" You will give the PH collective heart attacks

Quick google...

http://www.money.co.uk/gap-insurance.htm

Enjoy the new car.

[kiethton]

northandy said:

ALA seem to only get good reports, much much cheaper than a dealer too

ALA are who I went with for less than half the price of BMW for 4 years RTI. Never had to use it and sold the car so can't comment on the claim process.

It was a 3.5 year old, £20k E92 BMW 335i, I was 21 years old so £200 seemed a no brainer.

Edited by kiethton on Sunday 25th August 12:38

[northandy]

wemorgan said:

I don't see GAP insurance as relevant for a second hand car. If you write off your car then the insurance company will pay out the full value of the car at the time of the accident.

GAP insurance becomes more relevant on new cars that depreciate faster than the finance repayments. Is that likely on finance on a 5 year old car?

Op said car car bought from a dealer, id say at least £1,500 premium versus a private sale.

Return to invoice will pay the difference between insurance settlement and buying price over the length of the policy, obviously in 2 years time that woul be significant.

[wemorgan]

northandy said:

Op said car car bought from a dealer, id say at least £1,500 premium versus a private sale.

Return to invoice will pay the difference between insurance settlement and buying price over the length of the policy, obviously in 2 years time that woul be significant.

Granted. But what real 'need' is there to, for example, payout on a 7 year old car to allow the OP to buy a 5 year old car. It's too unnecessary IMHO.
There's too much unnecessary insurance these days, across the whole consumer market. You only have to read the news about banking loan insurance to see that.
IMHO of course.

[leafspring]

I've only ever paid cash for snotters and had fully comp insurance so forgive my ignorance, but WTF is 'GAP' insurance?

[GrahamC230K]

northandy said:

wemorgan said:

I don't see GAP insurance as relevant for a second hand car. If you write off your car then the insurance company will pay out the full value of the car at the time of the accident.

GAP insurance becomes more relevant on new cars that depreciate faster than the finance repayments. Is that likely on finance on a 5 year old car?

Op said car car bought from a dealer, id say at least £1,500 premium versus a private sale.

Return to invoice will pay the difference between insurance settlement and buying price over the length of the policy, obviously in 2 years time that woul be significant.

Exactly that.

Have a total loss in 30 months time and for the cost of an ALA return to invoice premium you will be very thankful. Not necessary in this context but an affordable spend that takes the sting out of such a situation.

I almost didn't but luckily saw the light before too late with both our recent purchases.

Only thing I would have done differently would be pay the extra for a 4 yr policy instead of 3 given I will likely keep it more than 3 years.

[SV8Predator]

wemorgan said:

GAP insurance becomes more relevant on new cars that depreciate faster than the finance repayments. Is that likely on finance on a 5 year old car?

Certainly, a five year old car is still depreciating by a great amount.

[littleredrooster]

leafspring said:

I've only ever paid cash for snotters and had fully comp insurance so forgive my ignorance, but WTF is 'GAP' insurance?

Guaranteed Asset Protection.

If the car is written off, the GAP insurance pays the difference between the motor insurance payout and the price originally paid for the vehicle. It is much more relevant to brand-new vehicles on finance where the outstanding finance can easily be greater than the payout in the early stages.

[leafspring]

littleredrooster said:

leafspring said:

I've only ever paid cash for snotters and had fully comp insurance so forgive my ignorance, but WTF is 'GAP' insurance?

Guaranteed Asset Protection.

If the car is written off, the GAP insurance pays the difference between the motor insurance payout and the price originally paid for the vehicle. It is much more relevant to brand-new vehicles on finance where the outstanding finance can easily be greater than the payout in the early stages.

Thank you

[diddles]

I wonder how many people who have had GAP policies have deliberately written off cars?

[Shurv]

Lets clear this one up a bit. GAP insurance pays the difference between the current market value of the car at the time of total loss and the invoice price. It does NOT pay the difference between the insurance payout and the invoice price. It is up to the customer to maximise the amount paid out by their insurer, then go for the remainder from the GAP insurer. It's a common misconception, even amongst the sales staff at dealerships.If the insurer is allowed to "low ball" the customer into accepting a low offer for their car,there may still be a small loss even after the GAP has paid out. Overall, it is IMO, good value and worth taking out. As they say, it's better to have it and not need it than need it and not have it!!

[northandy]

Shurv said:

Lets clear this one up a bit. GAP insurance pays the difference between the current market value of the car at the time of total loss and the invoice price. It does NOT pay the difference between the insurance payout and the invoice price. It is up to the customer to maximise the amount paid out by their insurer, then go for the remainder from the GAP insurer. It's a common misconception, even amongst the sales staff at dealerships.If the insurer is allowed to "low ball" the customer into accepting a low offer for their car,there may still be a small loss even after the GAP has paid out. Overall, it is IMO, good value and worth taking out. As they say, it's better to have it and not need it than need it and not have it!!

The policies state if you are in a total loss situation to contact them prior to accepting the insurers offer, i guess to ensure you still get market value.

[TwigtheWonderkid]

diddles said:

I wonder how many people who have had GAP policies have deliberately written off cars?

Obviously not many, as if it wasn't profitable, suppliers wouldn't be offering it.