Gap insurance

[Silver993tt]

I've just been offered gap insurance for a car I've bought recently. Car is worth £43k new. I bought it for £31k when it was 3 months old. The policy is for 3 years and they will make up the difference of the value of the car at the time of theft/total loss and the new price (43k). They policy costs £350 for 3 years cover.

I know nothing about how competitive this quote is otr even whether it's worth having. For £117 a year it doesn't seem bad value considering it becomes more useful as time goes by since th ecar's vale is less and the gap gets bigger giving a larger payout.

Any opinions on this?

[richterswil]

I recently bought GAP insurance from:

http://www.car2cover.co.uk/

Around half the price the dealer was quoting.

I looked at a few websites for quotes and it seems a no brainer to buy independently of the dealer - you can basically save their commission. Although the list below does not include all the sites I looked at, these were the most competitive for my needs.

http://www.ala.co.uk/
http://www.directgap.co.uk/
http://www.gap-insurance-online.com/
http://www.gapinsuranceforyou.com/default.asp

[Silver993tt]

Thanks for the info. The quote I received was from my car insurance company who called me up the day after I took the policy out.

[m1k1]

Look at 4 years, as the value will be lower (if you plan to keep the car that long) and make sure it’s in Glass’s guide. Got mine covered with ala.

[amir_j]

Silver993tt said:

Thanks for the info. The quote I received was from my car insurance company who called me up the day after I took the policy out.

Shop around, that quote is unlikely to be the best as they have a relationship with you already.

I used to work for a car finance house, GAP along with other insurances such as PPP are HUGE money spinners, statistically the claims are low so just depends in your risk profile/rainy day fund.

[dibbly_dobbler]

I just dont see the point in GAP insurance

You own a car for a while - at the end of this period (whether it's written off or sold) you get market value (either through insurance or sale price). Why would you want to pay to insure against the (presumably tiny) risk of losing the depreciation when this is what would normally happen anyway ?

OP - not having a go here, just try to understand

[Bumble SV]

Try the Autotrader website - it was by far the cheapest (via ALA mentioned above I think).

My take on this was that less than £100 was cheap to cover the biggest expense (ie depreciation) of buying almost any new/nearly new car for 3 years.

Like any insurance its hopefully a waste of money (especially Life Assurance!).

PS - I didn't bother with any of the bells and whistles that cover finance etc though as I thought that was taking it too far!

[richterswil]

dibbly_dobbler said:

I just dont see the point in GAP insurance

You own a car for a while - at the end of this period (whether it's written off or sold) you get market value (either through insurance or sale price). Why would you want to pay to insure against the (presumably tiny) risk of losing the depreciation when this is what would normally happen anyway ?

OP - not having a go here, just try to understand

My rationale was simple - in the event of a total loss claim I wanted the cars 'true' value to be reimbursed. It is common practice for insurance companies to reimburse 'bottom book' values meaning the replacement car you end up looking for is compromised in terms of age/spec/miles etc versus the car you have lost.

My E60 and 997 are both very well specified and the purchase prices reflected that - I wouldn't want to be replacing either with a lowish payment from an insurance company - unfortunately sending examples of similar cars etc tends to have little impact on insurance company valuations hence the market for products such as GAP insurance.

It can be a real consideration if you have finance outstanding - GAP can offer some protection against negative equity.

For the 997 mine was £200 for 3 years cover. In the event of a total loss claim the GAP cover makes up the difference between my insurance payout and the invoice price of the car (up to a max of £20k payout). Risk is low but £200 is only 6 months road fund licence or 3 tanks of fuel so its not too bad.

[dibbly_dobbler]

richterswil said:

dibbly_dobbler said:

I just dont see the point in GAP insurance

You own a car for a while - at the end of this period (whether it's written off or sold) you get market value (either through insurance or sale price). Why would you want to pay to insure against the (presumably tiny) risk of losing the depreciation when this is what would normally happen anyway ?

OP - not having a go here, just try to understand

My rationale was simple - in the event of a total loss claim I wanted the cars 'true' value to be reimbursed. It is common practice for insurance companies to reimburse 'bottom book' values meaning the replacement car you end up looking for is compromised in terms of age/spec/miles etc versus the car you have lost.

My E60 and 997 are both very well specified and the purchase prices reflected that - I wouldn't want to be replacing either with a lowish payment from an insurance company - unfortunately sending examples of similar cars etc tends to have little impact on insurance company valuations hence the market for products such as GAP insurance.

It can be a real consideration if you have finance outstanding - GAP can offer some protection against negative equity.

For the 997 mine was £200 for 3 years cover. In the event of a total loss claim the GAP cover makes up the difference between my insurance payout and the invoice price of the car (up to a max of £20k payout). Risk is low but £200 is only 6 months road fund licence or 3 tanks of fuel so its not too bad.

I take your points about the difference between a low insurance payout and the actual market value and also the negative equity issue if you have finance.