GAP insurance ??

[orinoco]

I have just bought a new ford fiesta and in the showroom I was told I had to ( by law ) go and see the insurance man who then told me that if I wrote off the new car I would not get the same amount I paid for it back from the insurance company only the value of the car as it was then. They do a GAP insurance policy to cover this difference around £300 which I declined. On getting home I rang Norwich Direct and asked them about this and they said that all big companies will replace a new car within the first year with a new car - so I was already covered and might have paid this extra £300 for nothing ...have I got this wrong ????

[deva link]

orinoco said:

I have just bought a new ford fiesta and in the showroom I was told I had to ( by law ) go and see the insurance man who then told me that if I wrote off the new car I would not get the same amount I paid for it back from the insurance company only the value of the car as it was then. They do a GAP insurance policy to cover this difference around £300 which I declined. On getting home I rang Norwich Direct and asked them about this and they said that all big companies will replace a new car within the first year with a new car - so I was already covered and might have paid this extra £300 for nothing ...have I got this wrong ????

I'm not sure what the proper term is, but the guy you saw is a finance person - the 'by law' bit is to do with financial services legislation to make sure that you understand what you're getting (although that doesn't seem to have occured in this case!).
You're correct about getting a new car for the first year, at least from your insurance company. It may not apply of you were claiming off someone else. However GAP typically runs for 3 years.
It's mainly an issue if you buy the car on finance - if the car is written off then you could well owe more to the finanace company than the car is worth. GAP covers this. You can also get 'enhanced' GAP, which, together with your insurance payout, gives you back the original invoice price of the car.

>> Edited by deva link on Thursday 3rd November 18:25

[Hughesie2]

I've just had to use GAP insurance on My Alfa which went up in flames recently, they paid out £3k to clear my finance off (dont ask!!)