GTR Forum banner
1 - 1 of 1 Posts

20 Posts
Discussion Starter · #1 ·
If your vehicle is declared a Total Loss (aka "written off") through accident, fire or theft, your Motor Insurance will pay you the Market Value of the vehicle at the time of the incident which led to the Total Loss claim.

This "Market Value" payout could be considerably lower, than either the original price you bought your vehicle for, or if you originally bought a brand new vehicle, the cost of replacing the vehicle with a new one at the time of claim.

This is where GAP insurance steps in.

Types of GAP insurance:

Finance GAP insurance.

Traditionally, GAP insurance was purchased only if you financed your vehicle and in the event of a Total Loss (through accident, fire or theft), Finance GAP insurance paid the difference between your Motor Insurance payout and the amount outstanding on finance at the time of claim. Of course, due to the fact that the balance outstanding on finance decreases over time as you make your repayments, there comes a time (sooner or later) when the value of the vehicle (that which would be paid by the motor insurer in the event of a Total Loss) would be sufficient in its own right to clear the remaining finance without the assistance of a GAP insurance policy.

To this end, there's not much interest in Finance GAP insurance these days, due to far superior levels of GAP insurance cover being available instead. Read on...

Invoice GAP insurance.

Invoice GAP insurance pays the difference between your Motor Insurance payout and the original price that you bought your vehicle for. It's therefore suitable for cash buyers as well as those that have financed their vehicle. If you're a cash-buyer it means that in the event of a Total Loss event, rather than only having the depreciated "Market Value" of your vehicle (plus any funds out of your own pocket) to replace the vehicle with, you'd have the original invoice price to use again. In relation to financed vehicles, a claim on an Invoice GAP insurance policy would (in most cases) leave the policyholder able to clear any remaining finance and have money left over to put towards the cost of their next vehicle.

However, specifically in relation to financed vehicles, with some agreements (high interest rates and/or no or little deposits etc) it's possible that in the early days, the settlement figure of the finance agreement may be higher than the original vehicle invoice price. This is where a combined Invoice GAP insurance policy steps in. "Combined" refers to it being a combination of both Finance and Invoice GAP insurance, whereby in the event of a Total Loss, the policy pays the difference between the Motor Insurance payout and the original invoice price, or (if greater) the amount outstanding on finance at the time of claim.

For more information about Invoice GAP insurance, please click here.

Replacement GAP insurance.

For a brand new vehicle, Replacement GAP insurance goes even further, by paying the difference between your Motor Insurance payout and what it would cost to replace the vehicle with a brand new version of the same (or nearest equivalent) vehicle at the time of claim - even if the replacement vehicle costs more than the you paid for the original vehicle first time around.

For more information about Replacement GAP insurance, please click here.

You have New-For-Old cover with your Motor Insurance, do you need to buy GAP insurance?

We often have people tell us, or see people on forums having written that they don't need GAP insurance because their Motor Insurance policy covers them on a New-For-Old cover during the first year (or two if you're insured with SAGA or NFU).

Not buying GAP insurance because you have New-For-Old cover for the first year is not a sensible approach. The reason, is that GAP insurance policies are purchased for durations of up to 5 years at a time. If you're going to keep your vehicle longer than the New-For-Old cover period of your Motor Insurance and plan to buy GAP insurance only when your New-For-Old cover period has expired, you're going to be disappointed!

The type of GAP insurance you will be able to buy once your New-For-Old cover period has expired, will provide a considerably inferior level of cover to that which you can buy within the first 180 days of buying the vehicle. The trick (for want of a better phrase), is to purchase a GAP insurance policy around the time that you buy your car, but elect to defer the start date of the policy so that it starts when the vehicle is 12 months old, thereby avoiding duplicating cover in the first 12 months but enabling you to still secure the highest level of GAP insurance cover for the later years.

What can we offer?

  • Invoice or Replacement GAP insurance for vehicles purchased for up to £125,000
  • Claim limits of up to £125,000
  • Durations of 1, 2, 3, 4 or 5 years
  • Invoice GAP insurance for cars up to 10 years old (purchased within the last 180 days)
  • Replacement GAP insurance for cars up to 180 days old.
  • Cash Payouts.
  • No Market Value clauses

Thank you for reading and if you have any questions about GAP insurance, please do not hesitate to get in touch.

Of course, if you'd like a quote in the meantime, please visit:


1 - 1 of 1 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.