GAP Insurance
#1
GAP Insurance
Just buying a 1 year old car - and garage is pushing strongly GAP insurance. I have always ignored it and never bought, but I plan to keep the car for abt 3 years and as it is costing £20k thought this time it may be worth it. Cost is £250 for 3 years and will pay the difference between an insurance write off figure and the price I originally buy the car for. Question is, is it worth it and is there a catch I should be aware of ?
#3
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Does that mean that you can buy a £20k car, drive it for 35 months, write it off and get a brand new replacement (say £10k normal insurance payout + £10k, i.e. the gap) for your £250 premium?
Effectively meaning that for the initial car cost + £250 every 3 years, you can drive around in a new car for ever (i.e. you just start another gap insurance each time you get a new car).
Sure it doesn't work like that or everyone would be at it.
Effectively meaning that for the initial car cost + £250 every 3 years, you can drive around in a new car for ever (i.e. you just start another gap insurance each time you get a new car).
Sure it doesn't work like that or everyone would be at it.
Last edited by Dracoro; 10 January 2005 at 02:40 PM.
#4
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I always understood that the insurance would only cover the value of the car when it it written off / stolen.
So, if you buy a car for 20k, keep it 3 years until the value drops to say 12k, and it gets wriiten off, if the insurance company only gives you 10 grand, the insurance will provide the other 2. So in the end you get your 12k...
So, if you buy a car for 20k, keep it 3 years until the value drops to say 12k, and it gets wriiten off, if the insurance company only gives you 10 grand, the insurance will provide the other 2. So in the end you get your 12k...
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That sounds more likely. Although if the value is £12k then how come the normal insurance has only paid out £10k? Is that their value as opposed to 'yours'? Will the gap insurers use a similar argument/model/values that your insurance company uses and say, for example that it's worth £10,100 so you only gain £100 etc.
If the cars worth £12k (market value, not 'your' own placed value) then you can persevere with your normal insurance and they should eventually pay out the £12k, after all, that's what you pay your normal premium for!
If the cars worth £12k (market value, not 'your' own placed value) then you can persevere with your normal insurance and they should eventually pay out the £12k, after all, that's what you pay your normal premium for!
#6
Took gap insurance for the wifes cooper,200 for 2 years cover.Its well worth it.I payed 12200 for the cooper so if anything happens to it i will get that amount back.Dont have to worry were its left or if anything happens to it.Makes sense really for an extra 100 a year.
#7
GAP insurance comes in different forms but what I am looking at is Invoice Protection - so the market value is immaterial - if the insurance co give you 10k then the GAP insurance will give you a further 10k back up to the Invoiced Price you originally paid (and yes upto 35 months later). The GAP insurers reserve the right to negotiate with the Insurance co. of course. This is only obviously if the car is written off and is comprehensively insured by yourself.
I cant see the hitch but feel there must be one.
I cant see the hitch but feel there must be one.
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#8
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Don't know how they work it out, but I get the impression it's like the difference between selling privately and selling to a dealer. If you can get 12k for it privately (or the dealer is selling at 12k), then the dealer is only going to give you 10k for it. I "think" insurance companies use the same guides for 2nd hand car prices as the dealers, and so you are only going to get the trade-in value. The gap insurance covers the difference.
Might be totally wrong, but I seem to remeber it being something like that. I do know that insurance companies very rarely pay out full whack for a claim like this....
Might be totally wrong, but I seem to remeber it being something like that. I do know that insurance companies very rarely pay out full whack for a claim like this....
#9
Gap insurance will pay off any out standing loan you have above the value the write off gives you. If you owe £13000 and the car is worth £10000 they will cover the £3000 to pay off the difference.
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Originally Posted by andy1505
Gap insurance will pay off any out standing loan you have above the value the write off gives you. If you owe £13000 and the car is worth £10000 they will cover the £3000 to pay off the difference.
#13
I'd be surprised if 'Invoice Protection' actually exist or the description is accurate.
Lets say I spend £20k on a car and 'Invoice Protect' insure it. 35 months later the car is worth 8k.
I take the car to the top of a very steep hill / cliff and accidentally my car falls 400feet into the sea.
The insurance co give me my 8k, other insurance gives me 12k and my car insurance premium goes up by £200...................repeat until dead.
this can't be right can it?
Lets say I spend £20k on a car and 'Invoice Protect' insure it. 35 months later the car is worth 8k.
I take the car to the top of a very steep hill / cliff and accidentally my car falls 400feet into the sea.
The insurance co give me my 8k, other insurance gives me 12k and my car insurance premium goes up by £200...................repeat until dead.
this can't be right can it?
#14
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Not sure, but I was offered GAP insurance on the cash purchase of a new car. I wasn't really listening to the waffle of the salesman as I repeatedly said "I'm not interested, lalalala", but either he was dumb for trying to sell it or it suggests there is more to it than covering the HP difference.
I suspect, if the truth be known, there are all sorts of insurance schemes out there and all those suggested above are probably available.
hail-hail - I wonder how many creative ways you could come up with destroying a car every 3 years before the insurance companies got wise to it and sent plod round for a little chat about fraud.
I suspect, if the truth be known, there are all sorts of insurance schemes out there and all those suggested above are probably available.
hail-hail - I wonder how many creative ways you could come up with destroying a car every 3 years before the insurance companies got wise to it and sent plod round for a little chat about fraud.
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hail-hail - I wonder how many creative ways you could come up with destroying a car every 3 years before the insurance companies got wise to it and sent plod round for a little chat about fraud.
#17
Just read the blurb:
quote:
Invoice Price Protection
Provides upto 36 months cover and pays the difference between your motor insurance settlement and the invoice price you originally paid for the vehicle. When added to your motor insurance settlement you will get back the original invoice purchase price for your vehicle.
unquote
So seems a great deal to me.
quote:
Invoice Price Protection
Provides upto 36 months cover and pays the difference between your motor insurance settlement and the invoice price you originally paid for the vehicle. When added to your motor insurance settlement you will get back the original invoice purchase price for your vehicle.
unquote
So seems a great deal to me.
#18
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Originally Posted by dtriggs
Just read the blurb:
quote:
Invoice Price Protection
Provides upto 36 months cover and pays the difference between your motor insurance settlement and the invoice price you originally paid for the vehicle. When added to your motor insurance settlement you will get back the original invoice purchase price for your vehicle.
unquote
So seems a great deal to me.
quote:
Invoice Price Protection
Provides upto 36 months cover and pays the difference between your motor insurance settlement and the invoice price you originally paid for the vehicle. When added to your motor insurance settlement you will get back the original invoice purchase price for your vehicle.
unquote
So seems a great deal to me.
#19
Looks like a good deal for the fraudsters then
Remember the advert ages ago, I think it was for Coke. A truck full of Coke ended up perched over a cliff. Someone grabs a can and the whole lot falls over.
Anyway when the truck driver is asked what happened, he said
"I just flipped out there for a second, and the truck flipped out with me"
This would be my claim on the insurance form every 3 years , but don't everyone use it or they will suss it out for sure
Remember the advert ages ago, I think it was for Coke. A truck full of Coke ended up perched over a cliff. Someone grabs a can and the whole lot falls over.
Anyway when the truck driver is asked what happened, he said
"I just flipped out there for a second, and the truck flipped out with me"
This would be my claim on the insurance form every 3 years , but don't everyone use it or they will suss it out for sure
#21
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Originally Posted by dtriggs
Just read the blurb:
quote:
Invoice Price Protection
Provides upto 36 months cover and pays the difference between your motor insurance settlement and the invoice price you originally paid for the vehicle. When added to your motor insurance settlement you will get back the original invoice purchase price for your vehicle.
unquote
So seems a great deal to me.
quote:
Invoice Price Protection
Provides upto 36 months cover and pays the difference between your motor insurance settlement and the invoice price you originally paid for the vehicle. When added to your motor insurance settlement you will get back the original invoice purchase price for your vehicle.
unquote
So seems a great deal to me.
Sounds too good to be true - so it probably is !
However - Sounds like a sound investment of £250 if that's what it is !!
#22
It's coming from a franchised Volvo dealer (one of the biggest in Uk) so should be above board. As you say it seems remarkably little money on a 20k car for such cover, which is why I was suspicious.
#23
But how many total loss claims are there for a new car?
After all if you buy a brand new car the insurance company will normally replace it with a brand new car should it get written off in the first year. So they are covering the car for 2 years, and only covering it for a total loss.
So effectively they are offering fire and theft insurance, and write off insurance, but only the top slice.
Most cars aren;t written off in the first three years. You just need to decide if ou might write it off by any means.
Delibrately writing it off is unlikely to be successfully and could result in a criminal record. If it doesn;t it will just increase the premiums the rest of us pay!
After all if you buy a brand new car the insurance company will normally replace it with a brand new car should it get written off in the first year. So they are covering the car for 2 years, and only covering it for a total loss.
So effectively they are offering fire and theft insurance, and write off insurance, but only the top slice.
Most cars aren;t written off in the first three years. You just need to decide if ou might write it off by any means.
Delibrately writing it off is unlikely to be successfully and could result in a criminal record. If it doesn;t it will just increase the premiums the rest of us pay!
#24
Thats a very good point - car is 13 months old so not new but it would take an awful lot to write off a 20k Volvo - unlikely in next couple of years atleast, so quite likely money down the drain. But then it isnt that much money...
#26
Here is a quote from an insurer.
"These days, if your car is "stolen and not recovered" or "written off" due to an accident, it's highly likely that the payout you receive from your motor insurance, will not be enough to either pay off any finance that you have outstanding on the car, or allow you to purchase a replacement vehicle without being out of pocket.
We have introduced three, value for money GAP Insurance policies, which between them offer three separate levels of protection against this - even if you bought your car for cash!"
"These days, if your car is "stolen and not recovered" or "written off" due to an accident, it's highly likely that the payout you receive from your motor insurance, will not be enough to either pay off any finance that you have outstanding on the car, or allow you to purchase a replacement vehicle without being out of pocket.
We have introduced three, value for money GAP Insurance policies, which between them offer three separate levels of protection against this - even if you bought your car for cash!"
#27
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I was offered the same a month ago.
I declined : you make your choice, you take your chances. It was £300 I didn't want to spend and the likelyhood of it being written of in 3 years is small.
Sounds like extended warranty from electrical retailers - don't know if you can get it elsewhere independently cheaper.
Sales bloke told me he had to offer it by law now, which I thought was bullsh1t.
I declined : you make your choice, you take your chances. It was £300 I didn't want to spend and the likelyhood of it being written of in 3 years is small.
Sounds like extended warranty from electrical retailers - don't know if you can get it elsewhere independently cheaper.
Sales bloke told me he had to offer it by law now, which I thought was bullsh1t.
#29
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Originally Posted by Nat21
I wonder if they'd decline GAP to certain cars? I got mine on a VW with solid residuals, but would it be offered on Protons or Hyundais etc that are worth about 36p after a couple of years?
I don't think they have many limitations for the type of car !
<cough>
#30
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We lost £10k over the price of our new scoob when it was written off after 14 months. If we'd been offered / known about GAP then, I'd probably thought 'I wouldn't write a car off!' However we have another new car, non scoob, but we do have full VRI (vehicle replacement insurance) which means that if the car gets written off/stolen, we will get the insurance money plus the difference between that and the price we paid for it until we have had the car 3 years. It cost £300 ie £100 per year.