Protect your car’s value if written off or stolen
Cover the gap between insurer payout and purchase price
Avoid large out-of-pocket costs after a total loss
GAP is an acronym for Guaranteed Asset Protection. You can think of the "asset" refers to your vehicle, but the protection element is a little more complicated and refers to financial cover for the depreciation of your vehicle.
Insurance providers will usually pay the current market value of your car in the event of a "total loss" or "write-off" claim. This can leave motorists out of pocket, especially as new cars typically drop in value between 15% and 35% in the first year and up to 50% or more over three years. GAP insurance covers the difference (or the gap) between the amount your insurance provider pays and the amount you'd need to pay to buy a new or equivalent replacement vehicle.
With GAP insurance, the types of cover and expenses will vary, this usually depends on factors such as whether the payout is for a new car or to pay existing finance off.
In the event that your car is stolen or written off, you will first need to claim on your car insurance. You should always check in with your GAP insurance provider to review your settlement claim with them before accepting. After this you should claim on your GAP insurance as soon as possible, if you have taken GAP insurance out to cover any finance, you should discuss how the outstanding amount will be settled; i.e. automatically covered on your behalf, or a payment to you that you can use to pay off your finance yourself.
Best for new or used cars bought in the last six months.
This type of GAP Insurance covers the difference between your insurer’s payout and either the price you originally paid or the amount needed to settle your outstanding finance balance, whichever is greater.
Best for new or used cars purchased more than six months ago or from a private seller.
This type of GAP Insurance covers the difference between your insurer’s payout, based on current value, and the vehicle's value at the GAP policy start date.
Best for new or used cars purchased on a lease or hire contract agreement where the lease company is the registered keeper.
This type of GAP Insurance covers up to 100% of any outstanding rental payments on a vehicle, as well as any shortfall in finance settlement.
Always check your policy for full cover details, but most policies will not cover:
Non-comprehensive car insurance
Driving under the influence
Old or well-travelled cars
Drivers not named on the policy
Business vehicles
Non-standard modifications
Repairable damage
Drivers without a valid licence
Buying GAP insurance directly from a dealer is typically more expensive, where you can expect to pay anywhere between £500-£1,500 for three years' cover. The cost depends on the length of your policy and the type of cover you choose. You can expect to pay anywhere between £100-£1,500 per annum depending on your vehicle and cover selected. You can start a quote to find the policy best suited to you and your vehicle.
