Gap Insurance query

[tim0409]

Hi

We purchased a new Suzuki Jimny this time last year and given there is 1-2 year waiting list, combined with recent announcement that they are pulling the current model in Europe due to emissions (they are planning to offer it as a commercial/van as they are exempt) until a hybrid replacement is available, current prices are higher than list by quite a margin, and they appear to be selling. We paid £16,500 new but if it is stolen or written off we would be unlikely to get anything close to the current market price (circa £18500) from the insurer; would I be able to get some form of GAP insurance for this scenario?

Many thanks

Tim

[tozerman]

No is the answer.
GAP insurance will only pay the difference between Insurance company payout and what you actually paid for the car (invoice price)

[roadsmash]

Errrrrrrrr

[Mr Tidy]

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

[tickedon]

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

What nonsense. It is perfectly reasonable to be able to afford the depreciation over 3 years. But as depreciation isn’t linear and drops a lot more in the first year, GAP covers that... gap. Plenty can afford it over 3 years but having to do it all over again after one year if it’s stolen ain’t what folk will budget for.

[Jamescrs]

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

I don't agree with that.

I bought an Audi A4 S-Line, used at 4 years old for near enough 14k.

Return to Invoice GAP with 3 years cover on that car was £120 total cost as I didn't buy it from a dealer, so essentially I'm getting cover back to the full purchase price for £40 a year. In my eyes that's worth having, it's not about being able to afford the depreciation.


To the O.P- You won't get GAP cover for the circumstances you are asking, maybe you could get agreed value insurance from a specialist broker but I'm not sure it would be worth it for the cost.

[SydneyBridge]

if you had bought, for example a Ferrari Pista, you could get your insurance to agree to cover market value and I see no reason why it would be no different with a lower value car.

The purpose of insurance is to put you back into the position that you were before an accident, so that would be to have another car of the same age etc.. whatever the current cost

I had a Seat Ibiza years ago that had not depreciated much and the insurers were referred to the values on Autotrader and agreed- surely the same would apply

I would check with your insurers anyway

[Butter Face]

SydneyBridge said:

if you had bought, for example a Ferrari Pista, you could get your insurance to agree to cover market value and I see no reason why it would be no different with a lower value car.

This is the answer. Just pay for a specialist insurer to cover you with an agreed value. I have one on my 17 year old POS as it's worth more than I paid for it 5 years ago. I think it cost me £25 this year to add it. No brainer.

[TREMAiNE]

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

What is pointless about it? Buy a car for 50k, 2 years later someone crashes into you and it gets written off, insurance give you 25k as that is all it is worth now... But then GAP insurance pays you another 25k... For a few hundred quid, it's a no brainer - especially for people who finance and risk going into negative equity if their car is written off through no fault of their own...

Mr Tidy said:

If you can't afford depreciation you can't really afford the car.

What a ridiculous statement.

I bought my car outright and I paid an additional couple hundred quid for GAP insurance after a couple of days of researching it.
I can very much afford the depreciation which I imagine I'll still incur as I don't plan to write my car off any time soon, but I'd really rather not lose lots of money if I don't have to hence why I'm paying more than I need to, to cover for unlikely circumstances...

I don't think people who can't afford the car would choose to pay extra to get GAP insurance... They'd be keeping costs as little as possible.

[Chris32345]

SydneyBridge said:

if you had bought, for example a Ferrari Pista, you could get your insurance to agree to cover market value and I see no reason why it would be no different with a lower value car.

The purpose of insurance is to put you back into the position that you were before an accident, so that would be to have another car of the same age etc.. whatever the current cost

I had a Seat Ibiza years ago that had not depreciated much and the insurers were referred to the values on Autotrader and agreed- surely the same would apply

I would check with your insurers anyway

Market value is one thing
Can't covering the cost of a brand-new car that's now more expensive is another thing

[Gary C]

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

Yes its nonsense !!! NOT

I bought a brand new Impreza Sti in September 2003

Bought 3 years Return to Invoice GAP insurance with the car that only started after one year.

In 2007, car got stolen

Insurance paid out about 15k, RTI paid out 10K

So for 3 1/2 years of motoring I got a free car.

And I bought a 911 3.2 carrera for 10K which is now worth 50K with the money.

So yes, its nonsense.

[nikaiyo2]

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

So someone who does not understand GAP insurance.
Its like any insurance, when you need it is brilliant, when you dont use it its a waste of money.
A mate of mine wrote off his Maserati Ghibli, at 2.5years old the GAP paid out nearly £50k.

Person A buys a car for £25k and after 3 years is driven into by a bus and the car is declared a total loss. His insurance pays the current value of the car, lets say £10k. So he has to come up with £15k to buy a new one, or buy a second hand alternative.

Person B buys same car for £25k (+£200 GAP) and after 3 years is driven into by a bus and the car is declared a total loss. His insurance pays the current value of the car, lets say £10k. His GAP pays him another £15k so he can go out and by another brand new one.

To my way of thinking Person A is the one who has lost out.

[SydneyBridge]

Insurance exists so you can be put in the same position as before an incident, not a better position.
Gap insurance mainly covers a difference if there is finance on a car and the write off value does not cost the balance

[nikaiyo2]

SydneyBridge said:

Insurance exists so you can be put in the same position as before an incident, not a better position.
Gap insurance mainly covers a difference if there is finance on a car and the write off value does not cost the balance

Yes, so your insurance puts should put you back to the position you were in at the point of the "accident."
GAP insurance puts you back to the position you were in when you bought the car.

[remould]

This is from my gap insurance,
the higher of either the finance agreement settlement figure (where applicable) or, the original invoice price you bought the vehicle for or, the cost of replacing the vehicle with a brand new version of the same (or nearest equivalent) vehicle at the time of loss (Replacement GAP Insurance),so if i'm reading this right this is what the OP wants ?

[roadsmash]

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

You have clearly misunderstood what GAP insurance is and the different types of it.

What complete and utter nonsense.

[Dave Hedgehog]

tickedon said:

Mr Tidy said:

I got talked into GAP insurance once, then realised it was pointless - cars depreciate, and they always have!

If you can't afford depreciation you can't really afford the car.

What nonsense. It is perfectly reasonable to be able to afford the depreciation over 3 years. But as depreciation isn’t linear and drops a lot more in the first year, GAP covers that... gap. Plenty can afford it over 3 years but having to do it all over again after one year if it’s stolen ain’t what folk will budget for.

This is very important if the car is financed especially on PCP, as it is easy to end up with an insurance settlement less than the outstanding finance on the car

for the low yearly cost i would always take out GAP RTI

[Pica-Pica]

My NFU insurance includes GAP insurance for the first two years from new (however, it is now three years old). I imagine it is standard for most of their policies, because I did not ask for it (their policy also covers breakdown). The precise terms are:-

a) Subject to theft and not recovered; or
b) damaged so that repairs will cost more than 60% of the manufacturer’s new list price (incl. VAT and accessories)
c) damaged so that repairs cost more than (Glass’s) current value.

They will then replace with a new car of the same make, model, and specification, or, if that is not available, they will pay the amount you paid for the car.

That seems pretty good cover for the first two years depreciation.
NFU were also the cheapest, local offices, and no admin fees to change anything.

[quinny100]

ALA Vehicle Replacement Insurance offers the sort of cover that the OP asked for:

With Vehicle Replacement Plus, you will receive an additional settlement to cover the financial shortfall between your insurer’s settlement and the replacement cost of your vehicle. If you have a finance agreement, we will pay up to the outstanding balance on the finance agreement if this is the higher amount at the time of the claim.

This policy is suitable if you’re concerned about potential price increases where the cost of buying the same car again could be higher than the amount you originally paid; however, the replacement cost could also be the same or lower.

https://www.ala.co.uk/gap-insurance/vehicle-replac...

Unfortunately for the OP, ALA will only sell you their GAP policies within 90 days of purchase of the vehicle.