Gap Insurance = scam. Or am I missing something?
Discussion
Been out shopping for a nearly new car, and every dealer tried really hard to flog me Gap Insurance. Doesn’t the very existence of this product mean insurance companies are effectively admitting that the book value the pay for your car doesn’t match the actual replacement cost, in which case they are scamming you by selling you insurance that doesn’t actually do what it says?
Popcorn at the ready....
COI: took delivery of a lease car from a dealer group last month who then blotted their copybook by having a toerag from a call centre cold call me to say my insurance would be inadequate in the event of a total loss and Id be thousands out of pocket unless I took out their GAP.
As I was insured with their own insurance company at the time this was somewhat disappointing.......
Rock Hectare
I got flamed on a previous thread a while ago for suggesting it was! 
But to be fair I think it has a place for people using finance to ensure they don't end up having to make up a shortfall between the insurance pay-out and the balance of the finance - but then I didn't use finance for mine!
At the end of the day insurers are only in business to make a profit, so if you have average luck you should be better off saving the cost.
But to be fair I think it has a place for people using finance to ensure they don't end up having to make up a shortfall between the insurance pay-out and the balance of the finance - but then I didn't use finance for mine!
At the end of the day insurers are only in business to make a profit, so if you have average luck you should be better off saving the cost.
My NFU Mutual Insurance covered GAP up to 2 years old, from first registration, as standard.
They will pay the cost of replacing with a new car of same make, model and specification, or, if that is not available, they will pay the amount I paid for the car. Covers
a) unrecovered theft
b) damaged and repairs cost more than 60% of new car list price
c) damaged and repairs cost more than the Glass’s current value at date of damage.
My car has just passed the 2 year mark.
They will pay the cost of replacing with a new car of same make, model and specification, or, if that is not available, they will pay the amount I paid for the car. Covers
a) unrecovered theft
b) damaged and repairs cost more than 60% of new car list price
c) damaged and repairs cost more than the Glass’s current value at date of damage.
My car has just passed the 2 year mark.
I bought Gap from an independent provider when I bought my new car on PCP. It cost £180 for 3 years cover up to £30k benefit. In the event of a total loss, the Gap pays up to cost of new replacement.
Mine was stolen after 15 months. Main insurance paid £44k. Finance outstanding was another £8k. Gap paid from the £44k up to the £69k cost of replacement new for old. Cash sent to my bank to do with as I please.
Mine was stolen after 15 months. Main insurance paid £44k. Finance outstanding was another £8k. Gap paid from the £44k up to the £69k cost of replacement new for old. Cash sent to my bank to do with as I please.
Mr Tidy said:
I got flamed on a previous thread a while ago for suggesting it was!
But to be fair I think it has a place for people using finance to ensure they don't end up having to make up a shortfall between the insurance pay-out and the balance of the finance - but then I didn't use finance for mine!
At the end of the day insurers are only in business to make a profit, so if you have average luck you should be better off saving the cost.
I can definitely see the point if you’re getting a car on finance or any of the rental-by-another-name schemes as you don’t want to be left paying for a car you don’t have, but like you I didn’t take finance. But to be fair I think it has a place for people using finance to ensure they don't end up having to make up a shortfall between the insurance pay-out and the balance of the finance - but then I didn't use finance for mine!
At the end of the day insurers are only in business to make a profit, so if you have average luck you should be better off saving the cost.
I was tempted, having been badly ripped off by my previous insurer when my car got written off by a woman in a massive SUV who was too busy being on the phone to realise the traffic in front of her had stopped. The offered value was 40% less than the replacement cost so I argued that the book value was b
ks as all the similar spec/age/mileage cars on Autotrader were nowhere near what they were offering ... in the end I settled for only 30% less than what it would cost me to replace the car ... in an accident that wasn’t my fault. So yeah, insurance companies are generally bds.My attitude to risk is generally to be one of the lucky ones, and when I’m not then I have a credit card. That’s why I don’t have boiler insurance, insurance against the dog knocking over my telly, and so on. Over the years I’ve saved enough on my boiler insurance to buy a new boiler if it breaks, so generally it works for me.
I get why those policies exist, and you’re insuring a genuine risk so that’s fine. I don’t understand how car insurance companies get away with this tacit admission that they insure your car but they will rip you off if you need to claim unless you take this other additional product.
Tricuspid said:
I can definitely see the point if you’re getting a car on finance or any of the rental-by-another-name schemes as you don’t want to be left paying for a car you don’t have, but like you I didn’t take finance.
I was tempted, having been badly ripped off by my previous insurer when my car got written off by a woman in a massive SUV who was too busy being on the phone to realise the traffic in front of her had stopped. The offered value was 40% less than the replacement cost so I argued that the book value was bks as all the similar spec/age/mileage cars on Autotrader were nowhere near what they were offering ... in the end I settled for only 30% less than what it would cost me to replace the car ... in an accident that wasn’t my fault. So yeah, insurance companies are generally bds.
My attitude to risk is generally to be one of the lucky ones, and when I’m not then I have a credit card. That’s why I don’t have boiler insurance, insurance against the dog knocking over my telly, and so on. Over the years I’ve saved enough on my boiler insurance to buy a new boiler if it breaks, so generally it works for me.
I get why those policies exist, and you’re insuring a genuine risk so that’s fine. I don’t understand how car insurance companies get away with this tacit admission that they insure your car but they will rip you off if you need to claim unless you take this other additional product.
I think you're misunderstanding general car insurance. It's there to put you back in the position you were in immediately before the loss. If your car was by then 3 years old, it's hardly putting you back in the position you were in by buying you a new one. The risk of depreciation is yours as car buyer, however you buy it. If you want to insure against depreciation in a total loss scenario, buy Gap insurance.I was tempted, having been badly ripped off by my previous insurer when my car got written off by a woman in a massive SUV who was too busy being on the phone to realise the traffic in front of her had stopped. The offered value was 40% less than the replacement cost so I argued that the book value was b
ks as all the similar spec/age/mileage cars on Autotrader were nowhere near what they were offering ... in the end I settled for only 30% less than what it would cost me to replace the car ... in an accident that wasn’t my fault. So yeah, insurance companies are generally bds.My attitude to risk is generally to be one of the lucky ones, and when I’m not then I have a credit card. That’s why I don’t have boiler insurance, insurance against the dog knocking over my telly, and so on. Over the years I’ve saved enough on my boiler insurance to buy a new boiler if it breaks, so generally it works for me.
I get why those policies exist, and you’re insuring a genuine risk so that’s fine. I don’t understand how car insurance companies get away with this tacit admission that they insure your car but they will rip you off if you need to claim unless you take this other additional product.
GAP from the right provider is a bargain.
For 134 quid I get 3 years cover so that in the event of a total loss payout instead of getting the market value I get the amount I paid for the car new.
I genuinely don’t see why people don’t get it.
Would I buy it from a dealer? No, but if you have half a brain you can find it at a fraction of the price on the internet.
For 134 quid I get 3 years cover so that in the event of a total loss payout instead of getting the market value I get the amount I paid for the car new.
I genuinely don’t see why people don’t get it.
Would I buy it from a dealer? No, but if you have half a brain you can find it at a fraction of the price on the internet.
janesmith1950 said:
think you're misunderstanding general car insurance. It's there to put you back in the position you were in immediately before the loss. If your car was by then 3 years old, it's hardly putting you back in the position you were in by buying you a new one. The risk of depreciation is yours as car buyer, however you buy it. If you want to insure against depreciation in a total loss scenario, buy Gap insurance.
It’s not about depreciation, in my example I bought the car at 8 years old, got written off at 10 years old. Insurance eventually paid out 30% less than it would cost me to buy another 10 year old car. For an accident that wasn’t my fault. SteBrown91 said:
GAP from the right provider is a bargain.
For 134 quid I get 3 years cover so that in the event of a total loss payout instead of getting the market value I get the amount I paid for the car new.
I genuinely don’t see why people don’t get it.
Would I buy it from a dealer? No, but if you have half a brain you can find it at a fraction of the price on the internet.
^^^ This ^^^For 134 quid I get 3 years cover so that in the event of a total loss payout instead of getting the market value I get the amount I paid for the car new.
I genuinely don’t see why people don’t get it.
Would I buy it from a dealer? No, but if you have half a brain you can find it at a fraction of the price on the internet.
Whenever someone mentions GAP on here it descends into a discussion about finance/leases/pcp
Bought a nearly new Focus years ago (for cash, well before the advent of cheap finance deals). After 2 years it was hit by some pissed up hillbillies in an old 4x4 and written off. Insurance paid out £6.5k, GAP paid out another £3.5k so I pretty much got back what I paid for the car.
Tricuspid said:
. I don’t understand how car insurance companies get away with this tacit admission that they insure your car but they will rip you off if you need to claim unless you take this other additional product.
It's not a tacit admission of anything. Car insurance pays market value. GAP insurance is for people for whom market value isn't sufficient, and for whatever reason, they need a pay out above market value. Gassing Station | Car Buying | Top of Page | What's New | My Stuff