Gap Insurance = scam. Or am I missing something?
Discussion
Interesting topic, I just bought a 1 year old car from a main dealer and they were pushing GAP hard but I declined as I knew it could be bought cheaper elsewhere.
I have not had GAP before so undecided but I guess £160 for 4 years on a £20k car purchase means if anything happens I get back the invoice price or replacement cost so I effectively get back into the same value car I bought originally.
Any recommendations for GAP Insurers?
I have not had GAP before so undecided but I guess £160 for 4 years on a £20k car purchase means if anything happens I get back the invoice price or replacement cost so I effectively get back into the same value car I bought originally.
Any recommendations for GAP Insurers?
TwigtheWonderkid said:
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.
Quite so - when you take out a finance agreement you evenly spread the depreciation costs as you go... Yet a new car doesn't depreciate in a linear fashion once it's been used - the first thousand miles take out a massive amount of value compared to the next 5-10k.
Tricuspid said:
It’s not - for me at least - anything to do with depreciation. If I have a three year old car which is written off I expect enough money to buy another three year old car. In my experience that’s not what happens
In my experience that's exactly what happens. Unfortunately, people tend to overvalue their cars. They think their own car is worth more than it is, fuelled by seeing adverts for similar cars at prices they will never actually sell for. TwigtheWonderkid said:
In my experience that's exactly what happens. Unfortunately, people tend to overvalue their cars. They think their own car is worth more than it is, fuelled by seeing adverts for similar cars at prices they will never actually sell for.
Surely the only true assessment of the market is by someone wishing to buy and looking to the various options available?If chap wants to buy a 2008 A6 avant and they’re all around £X, no good telling him they’re only worth half that and the ads are all overpriced...
When my 3 year old car was written off, I was offered a miserable price. No GAP. For the time taken to place one call to the adjuster, I was able to negotiate a price that was £500 less than I had paid for the car 10 months previously. I count myself lucky for that, and the settlement was better than expected (obviously). My bargaining chips: it was an approved used car, and I should be entitled to another one similar, and my car was pretty well loaded with options - adjuster gave me the cost of the 2 most exoensive options.
So would I have GAP? On an unfinanced car?
Yes. I'm never going to get that lucky again!
I'm with totallossgap who, if the car is written off, will give me an identical new one. If its been superceded, then I get the new model.
So would I have GAP? On an unfinanced car?
Yes. I'm never going to get that lucky again!
I'm with totallossgap who, if the car is written off, will give me an identical new one. If its been superceded, then I get the new model.
syl said:
The problem is that a finance company won't be happy to let you replace a total loss with a like-for-like, but now second hand, car whilst letting you continue to pay them monthly payments then return it at the end of the original deal.
Is that definetely true?As has been said elsewhere, insurance is just to get you back to the position you were in before the loss occurred. So if I leased a car for 2 years and 1 year in it was written off, I'd expect the insurance payout to be sufficient to buy a replacement car of the same age and spec.
In this scenario, why would the finance company of the original car expect to get back the original value?
Tricuspid said:
It’s not - for me at least - anything to do with depreciation. If I have a three year old car which is written off I expect enough money to buy another three year old car. In my experience that’s not what happens as the book value of my Audi was nowhere near the cost.
You would only expect to get the value of a 3 year old car if it was written off at 3 years old. If you have owned it for 2 years then you would expect to get the value of a 5 year old car back if it is written off. Regular insurance is to put you back into the position you were in when the car is declared a total loss, GAP insurance will put you back to the position you were in when the car was purchased. So you should be able to go back to the Audi garage and purchase a 3 year old car not a 5 or 6 year old car.
A good mate of mine wrote off his Quattroporte at just under 3 years old, the difference between insurance payout and a new one, was well over £30k... £500 in GAP insurance seems cheap to me.
To me it makes no sense to not have it, for my car it works out at £5.50 a month over the 3 years I will keep the car for and it means it the worst happens 2 days before i get rid of it I can go to BMW and get a brand new car, not a 3 year old one...
Mercury00 said:
Seems like a good deal to me. Take out a three year RTI GAP policy, forget to apply handbrake after 35 months, get all your money refunded.
Not quite.“The catch” is that the policy only pays out in the event of a total loss.
Leaving the handbrake off intentionally wouldn’t be wise, because there’s no gaurantee this would write the car off.
More likely it would roll down the hill into a parked car causing moderate damage to both that is fixable, with the only outcome being losing your no claims and looking a bit of a tit.
Alternatively, you could try to set fire to your car and pretend it was done by an arsonist, but then you’re committing major insurance fraud.
Probably better ways to make a bit of cash on the side.
Despite what some people say, GAP insurance (RTI and the other types) policies are most certainly not “a con” and can in fact be very useful, especially when purchased through reputable companies.
As per all types of insurance, it’s not a waste of money if you need to make a claim.
My car (Audi A4 Avant) was stolen over night, Friday into Saturday, the scum bags broke into my house and took the keys and various other bits.
My insurer are already putting the car down as a total loss.
Thankfully I have GAP insurance on a return to invoice basis as I bought the car cash so I at least have the knowledge I will be covered to the invoice price to secure a new car at some point.
I bought cover away from the car dealer so it was money well spent now
My insurer are already putting the car down as a total loss.
Thankfully I have GAP insurance on a return to invoice basis as I bought the car cash so I at least have the knowledge I will be covered to the invoice price to secure a new car at some point.
I bought cover away from the car dealer so it was money well spent now
Jamescrs said:
My car (Audi A4 Avant) was stolen over night, Friday into Saturday, the scum bags broke into my house and took the keys and various other bits.
My insurer are already putting the car down as a total loss.
Thankfully I have GAP insurance on a return to invoice basis as I bought the car cash so I at least have the knowledge I will be covered to the invoice price to secure a new car at some point.
I bought cover away from the car dealer so it was money well spent now
Sorry to hear that the scum took your motor. My insurer are already putting the car down as a total loss.
Thankfully I have GAP insurance on a return to invoice basis as I bought the car cash so I at least have the knowledge I will be covered to the invoice price to secure a new car at some point.
I bought cover away from the car dealer so it was money well spent now
Great news re the insurance!
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