Gap Insurance Query

[Harbuzi]

Loooking for a bit of guidance regarding a decision over whether to invest in some gap insurance. Thought I would add some figures to make the example relevant (and to see if others agree with my sums)!

New car purchased for £11,690 - £2205 in part ex + dealer contribution/discount.
Amount of finance £9485. This is being paid by 35 monthly payments of approx £180 + a final payment (or hand the car back etc etc).

My current insurance replaces vehicle in first year so gap insurance would be deferred in any case.

Now what I don't want to happen is car to be written off and insurance payout to not cover finance. But if in 12 months + 1 days time the worst happens and I write the car off, I will have paid 12 X 180 which is £2160 so finance company would still be owed £7325 (I know they may front load the interest and to be honest I don't have he paperwork handy).

Parkers (I know they are hardly the most reliable source) are showing a 1 year old model of the same car as valued at £9800 at a franchised dealer so in theory the insurance company should pay this? Or would they only offer what one could be bought for privately? Either way, they should pay more than the outstanding finance or replace with a comparable vehicle right?

Or, sorry for the abundance of queries, if car was written off I could buy another with my insurance payout and just continue paying off the finance so I still have a car, and I'm still paying the same amount of money out (I know in this scenario I would have to pay the final payment as finance company won't want a different car back). Or, is it the case if your car is writen off that the finance has to be settled immediately?

Sorry again for all the questions. It's just this gap insurance business sounds too good to be true. I know the vehicle replacement one can be obtained for £120 for three years cover but don't want to waste money - yes I know I have already buying a new car

[xrv]

Harbuzi said:

Parkers (I know they are hardly the most reliable source) are showing a 1 year old model of the same car as valued at £9800 at a franchised dealer so in theory the insurance company should pay this?

An insurance company would never pay out dealer prices for a car. Trade value is probably more like what you'll see.

Harbuzi said:

if car was written off I could buy another with my insurance payout and just continue paying off the finance so I still have a car, and I'm still paying the same amount of money out (I know in this scenario I would have to pay the final payment as finance company won't want a different car back). Or, is it the case if your car is writen off that the finance has to be settled immediately?

There is now way on earth a finance company would let you continue paying off finance on a written off car on a PCP deal if it was written off.

Gap insurance is a really good idea and personally I think anyone who takes a car on finance without one is an idiot. Even after the first year on a PCP I've seen people in negative equity so the last thing you'd want is to crash and find you owe money and have to find the deposit for a new car at the same time.
Just make sure it is from a reputible company and it covers return to invoice and financial shortfall and you'll be fine.

[U T]

G.A.P. insurance (it's not gap as in covering the gap, but Guaranteed Asset Protection) can be a good thing.

But just looking at your figures, I think the market value of your car, and hence your insurance payout, is always going to be well above what you owe, because of your px/downpayment, so I think you'll be paying for a policy you can never claim on.

That's not to knock GAP cover, which as I said can be good. But in your case, no.

[Andy665]

Simple advice - buy it but make sure it's return to invoice - that way if the car was stolen, written off, total loss etc you would get the £11690 back for the duration of the cover.