GAP insurance - is it a scam?
Discussion
You can buy a car for £25k from a dealer and if you write it off 3 years later, this insurance will pay the difference between your insuranc company payout and your purchase price. Call me cynical, but this for about £150.....
If you buy say an 05 plate plate Merc E300 and then the market value for it after 3 years is £10k, the insurance company would have to stump up the £15k difference and you've paid £150. Now, asuming they make no profit and have no costs, this places the odds of you writing your car off at 100-1. The fugures don't stack up at all. Is this GAP insurance actually likely to pay up or are they going to wriggle ther way out of it through the T's and C's?
Has anyone here actually tried to claim on GAP insurance?
Sorry for being a cynical old git, but this seems too good to be true.
If you buy say an 05 plate plate Merc E300 and then the market value for it after 3 years is £10k, the insurance company would have to stump up the £15k difference and you've paid £150. Now, asuming they make no profit and have no costs, this places the odds of you writing your car off at 100-1. The fugures don't stack up at all. Is this GAP insurance actually likely to pay up or are they going to wriggle ther way out of it through the T's and C's?
Has anyone here actually tried to claim on GAP insurance?
Sorry for being a cynical old git, but this seems too good to be true.
Jubal said:
Err, doesn't gap isurance cover the gap between the insurance payout and the outstanding finance amount?
lifesabeach said:
I thought Gap insurance was to pay the difference between the insurance pay out after a total loss and any shortfall with outstanding finance on the vehicle? Not the original purchase price. not 100% sure though
That's RTV not RTI.
Oh FFS, here we go again.....
Its as good as it appears. If you need to use it, great. If you dont, then its cost you £50 a year just in case. End of.
Now all we have to do is just wait for the motor trade haters to arrive and tell you that its a con and if you buy it you'll catch cancer, lose your left arm, lose your right hand and grow a cock on your belly button. All because the motor trade conned you.
You have been warned.
CIS121 said:
Sorry for being a cynical old git, but this seems too good to be true.
Its as good as it appears. If you need to use it, great. If you dont, then its cost you £50 a year just in case. End of.
Now all we have to do is just wait for the motor trade haters to arrive and tell you that its a con and if you buy it you'll catch cancer, lose your left arm, lose your right hand and grow a cock on your belly button. All because the motor trade conned you.
You have been warned.
Sold gap to a mate 2 years ago when he bought a punto from me. Car recently stolen, paid £6495 for it and got £2800 from the insurance. Gap have paid him the difference, no problems. Seen it work many many times, am always amazed that people buying cars in excess of £5 k dont buy it !!
Most Main dealers and larger finance /insurance houses do it , 2 types RTI is as it says Return to Invoice (usualy has a £15k limit) and the other is Finance Shortfall and in general most have to be purchased within 90 days ,but like everything these days, plenty of cut price versions on the market ,so if its Less the £400 on sub £20K car buyer beware
clinchy said:
Most Main dealers and larger finance /insurance houses do it , 2 types RTI is as it says Return to Invoice (usualy has a £15k limit) and the other is Finance Shortfall and in general most have to be purchased within 90 days ,but like everything these days, plenty of cut price versions on the market ,so if its Less the £400 on sub £20K car buyer beware
No not really, it's normally far cheaper, because it's not really insurance at all - it's re-insurance.
When I bought my BMW I was offered 'BMW Shortfall Insurance' which, they explained, was the difference between the insurance payout and the original purchase price. I don't know how the BMW product compares to other products though and this wes nearly eight years ago so things may well have changed since.
petros said:
Seen it work many many times, am always amazed that people buying cars in excess of £5 k dont buy it !!
But it's like any insurance, you're gambling that you will write your car off, the insurance company is gambling that you won't.
It's arguably worth it on a car that will depreciate significantly, but even then you should get a payout that allows you to make a direct replacement of your car.
Gap insurance declines in value over time to take into account the depreciation in your vehicle. The money you're likely to get paid by the insurance company will be close to your replacement cost and the gap insurance will have depreciated an equal amount so that if they ever do have to pay, it won't be much.
Personaly I wouldn't go near it.
Personaly I wouldn't go near it.
As with any insurance, unless you write it off, you'll never see it, but for £50 a year its a no-brainer.
It does work, I sold hundreds of policies to people when I was in the trade, and everyone that needed it got what they were told they would get.
Testament to this was when the car with VRIP/GAP on it got written off, they came back and bought another car as a replacement and actually ASKED for it to be added to the invoice.
It does work, its not a con. It does vary in price however, I used to sell it for £349 IIRC, you can shop around, thats really the only variable.
HTH
It does work, I sold hundreds of policies to people when I was in the trade, and everyone that needed it got what they were told they would get.
Testament to this was when the car with VRIP/GAP on it got written off, they came back and bought another car as a replacement and actually ASKED for it to be added to the invoice.
It does work, its not a con. It does vary in price however, I used to sell it for £349 IIRC, you can shop around, thats really the only variable.
HTH
nobleguy said:
Gap insurance declines in value over time to take into account the depreciation in your vehicle. The money you're likely to get paid by the insurance company will be close to your replacement cost and the gap insurance will have depreciated an equal amount so that if they ever do have to pay, it won't be much.
Personaly I wouldn't go near it.
Personaly I wouldn't go near it.
There is more than one type-you can get it to restore to original purchase price. What exactly is stopping you ploughing into a wall after 2 year 11 months?!! Accidents do happen. I've never written a car off but was quoted £350 to cover my ST220 for three years-i know my 220 will be worth FA in three years so the dodgy people out there would buy it and write the car off after the aforementioned timescale!! I haven't taken up the deal as (a) i doubt very much it will get written off and (b) i'm not the kind of person to do it on purpose!!
I know of someone who took the return to purchase price type thing out, and two and a half years later wrote their car off. The policy paid out in full, and he bought the same car again (but brand new).
The only thing I can't really work out is - what's to stop someone from using this to get a new car every two and a bit years without having to shell out for it, other than the fear of injury from and accident they may engineer?
Dan
The only thing I can't really work out is - what's to stop someone from using this to get a new car every two and a bit years without having to shell out for it, other than the fear of injury from and accident they may engineer?
Dan
nobleguy said:
Gap insurance declines in value over time to take into account the depreciation in your vehicle. The money you're likely to get paid by the insurance company will be close to your replacement cost and the gap insurance will have depreciated an equal amount so that if they ever do have to pay, it won't be much.
Personaly I wouldn't go near it.
Personaly I wouldn't go near it.
Well done, that's exactly wrong.
Calorus said:
nobleguy said:
Gap insurance declines in value over time to take into account the depreciation in your vehicle. The money you're likely to get paid by the insurance company will be close to your replacement cost and the gap insurance will have depreciated an equal amount so that if they ever do have to pay, it won't be much.
Personaly I wouldn't go near it.
Personaly I wouldn't go near it.
Well done, that's exactly wrong.
Correct, GAP does not depreciate,RTI (return to invoice) cover is exactly what it says, return to the original invoice price of the car, Less any freebies, ie warranties, and the actual price of the gap itself.
Calorus said:
nobleguy said:
Gap insurance declines in value over time to take into account the depreciation in your vehicle. The money you're likely to get paid by the insurance company will be close to your replacement cost and the gap insurance will have depreciated an equal amount so that if they ever do have to pay, it won't be much.
Personaly I wouldn't go near it.
Personaly I wouldn't go near it.
Well done, that's exactly wrong.
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