How much is GAP insurance?

In a world where we seem to have ever increasing outgoings, GAP insurance can seem like one more expense to add to the pile when you hopefully will never need to claim against it. Especially when you already have comprehensive car insurance.

Many dealerships will offer you GAP insurance when you are purchasing your car, although this can sometimes be a more expensive option. It is always advisable to shop around for different quotes.

So how much will it cost you and is it worth it? 

What does GAP insurance offer me?

GAP insurance has the most benefit for those who are buying a brand new car. Within the first three years your vehicle can lose up to 60% of its original value.

Let’s imagine that you purchased your dream car for £20,000 but two years later it is written off by your insurance company after an accident and they offer you the current market value of £12,000. The maths doesn’t add up and you can quickly find yourself with a massive loss and no car to show for it. 

This is where GAP insurance comes in. It is an extra policy alongside your comprehensive insurance. They will pay you the difference between the original purchase price and the current market value of your vehicle before the damage.

Can I have GAP insurance for the life of my car?

GAP insurance is most beneficial in the first three years as this is when cars lose most of their value. Older cars do not depreciate as quickly.

Most policies are for three years although you can take out a new policy after this. Your car would need to be revalued and most insurers will only offer protection on a car under seven years of age.

Do I need both comprehensive insurance and GAP insurance? Can I have just one?

You are able to have just comprehensive insurance on it’s own, although you cannot take out GAP insurance without having comprehensive insurance.

For those only wanting third party or third party-fire & theft cover you would not be able to have GAP insurance

Comprehensive insurance will cover any damage to your vehicle that is repairable. It will also cover damage to someone else’s vehicle and property. You will only be able to claim on your GAP insurance if your car is written off after an accident or is deemed unrecoverable after being stolen. 

How much does GAP insurance cost?

As with all types of insurance the price varies between different insurers and can depend on 

  • The make and model of the vehicle. 
  • The original purchase price. 
  • The age of the vehicle.
  • How many miles the vehicle has done. 

On average a policy will cost between £100-£300 and can be paid in monthly instalments just as comprehensive insurance can.  

Many dealerships will offer you GAP insurance when you are purchasing your car, although this can sometimes be a more expensive option. It is always advisable to shop around for different quotes. In recent years the Financial Conduct Authority brought in new regulations for dealerships offering GAP Insurance, these include –

  • Informing the customer that there are other GAP insurance providers available. 
  • Informing the customer of the total cost of the GAP policy.
  • Informing the customer of the duration of the policy. 
  • Informing the customer whether the GAP insurance is an optional or compulsory part of the vehicle purchase.

If you do not want to obtain your GAP insurance through the dealership at the time of purchasing your car then there are many other companies that offer this. You can contact them directly for a quote and they will be able to advise you on the best type of policy for your circumstances so you can take your brand new car out onto the open road with the peace of mind that you are covered for all eventualities. 

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