GAP Insurance (1 Viewer)

[TerryK]

Just going through all the paperwork on the 3 1/2 year old van that I recently bought privately. I see that amongst the papers are details of a GAP insurance that the previous owner paid for when he purchased the van. I have taken out GAP insurance in the past on a new & expensive car, but not previously on a van.
What are peoples thoughts on GAP insurance? Do you think that it is necessary on a van the age of mine?

Terry

 

[DavidG58]

I bought (or rather got conned into it) as well a few years ago on an expensive car

Would never bother again, never heard of anyone claiming on such a policy

About as much use as the once in a lifetime bodywax application they try and sell as well

Not for me, I think I paid £500 on a £50K car over 10 years ago

 

[Langtoftlad]

GAP insurance policy from a supplying dealer - never.
A GAP policy from a specialist insurer - quite possibly.

I think my 3 year back to invoice GAP from ALA cost me £90 on my new car last year.

Some insurance policies will replace your new vehicle in the first year...

Just a quick google quote via ALA, three years cover (£30k) on a £50k van was £258... Worth consideration .
https://www.ala.co.uk/gap-insurance/motorhome

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[Derbyshire wanderer]

I thought it was only available for new vehicles and never secondhand as only new has fixed retail pricing.

 

[Langtoftlad]

I thought it was only available for new vehicles and never secondhand as only new has fixed retail pricing.

Apparently not never


but I'd agree, a lot less valuable than on a new vehicle.

 

[Derbyshire wanderer]

Apparently not never


but I'd agree, a lot less valuable than on a new vehicle.

I assumed never as it would be open to potential fraud as the invoices could potentially be inflated to the top end of a trade valuation.

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[MitchandJenny]

We got a 5 year one from a private insurer on our new van (bought 3 years ago) and I feel happier knowing its there, as we do go to "foreign parts" a lot.
If it does get "totalled" in the 5th year, we do get the FULL cost of a new van.
Mitch.

 

[Stretto Boy]

I have never bothered in the past but was offered it for about £250 for three years cover by the supplying dealer of our new Auto-Sleeper. I thought that at that price it was worth having, so I went for it.

 

[mike mcglynn]

MY nephews wife had a minor bump in their brand new car and put in a small repair garage which unfortunately burnt down during the night taking at least 3 cars with it But he had taken out gap insurance and his car was replaced without question with another new one at no cost to him.

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[The Wino]

If you have an average risk of claiming they must cillect more in premiums than they pay out or they would go bust so best to take the risk yourself. Also the big advantage stated is that if you have a big finance package on a car they will only pay out for the market value as cars depreciate so quickly you could end up owing loads more than the payout . With depreciation being a lot lower on a secondhand motorhome it looks to me like a waste of money.

 

[TerryK]

Thanks for all your thoughts & comments. I probably won't bother, but in case anybody is interested the invoice shows a premium of £450, but I cannot see how long a period of cover was involved.
From past experience I think on second hand vehicles you have to decide how much cover you want - say £40,000 - and if the vehicle is written off and the insurance company only offer you £30,000, you can claim the extra £10,000 on the GAP insurance.
Terry

 

[Langtoftlad]

@TerryK
It might be worth contacting the insurers to see if that policy expired after 3 years or is indeed still valid up to five...
...and whether it's transferable to you the new owner.

You might be insured for an event which will probably never happen & not know it.

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[Janine]

I'd never heard of GAP insurance until I was looking at buying a car recently and, yes, it is available on second-hand vehicles.

 

[The Wino]

I got sold it once never again very expensive for what it covers nice commission for the garage/salesman

 

[Langtoftlad]

I got sold it once never again very expensive for what it covers nice commission for the garage/salesman

But a lot better value buying direct from the insurers - like anything Caveat Emptor, and shop around.

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[mikebeaches]

As has been mentioned, insurance companies are obviously in business to make a profit. So much so, I'm more than happy to own a few shares in one of the country's larger insurers.

But when it comes to buying cover, I ask myself - is this essential? And is it value for money, or could I reasonably cover the risk myself?

So comprehensive motor insurance, breakdown insurance, house insurance and travel insurance (medical) are the ones I'm generally happy to pay for.

But GAP insurance, mobile phone insurance, credit card insurance, extended product warranties, funeral expenses etc etc - no thanks!

I should add, life insurance was important when I was younger and had family responsibilities, but fortunately my employer paid the premiums prior to retirement. But I would have paid for it in any case if it wasn't provided.

I bought a 12-month old used car last week, and couldn't believe the lengths the dealer went to to persuade me to buy GAP insurance. And of course the harder he tried, the bigger I realised his commission was going to be... And that is after the healthy margin the insurer would also make.

So where feasible, I prefer to carry the risk myself.

You win some, you lose some... just a personal choice.

 

[Langtoftlad]

The GAP insurance I quoted above was for £30k for 3 years... about the same level of cover as I have for House Contents for not a dissimilar premium... I also believe that the risk of a total motorhome loss is higher than a total house contents loss...

Thus I deem, personally, that GAP on my new van is insurance worth buying (direct from the insurers, not the dealership).

 

[Jagtazman]

We have it on the wife's lease car and my car has a personal loan and I have back to invoice gap cover
Both with ALA who pricedarched the competition and gave a discount. IMHO ALA are one of the best around.

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[The Wino]

As has been mentioned, insurance companies are obviously in business to make a profit. So much so, I'm more than happy to own a few shares in one of the country's larger insurers.

But when it comes to buying cover, I ask myself - is this essential? And is it value for money, or could I reasonably cover the risk myself?

So comprehensive motor insurance, breakdown insurance, house insurance and travel insurance (medical) are the ones I'm generally happy to pay for.

But GAP insurance, mobile phone insurance, credit card insurance, extended product warranties, funeral expenses etc etc - no thanks!

I should add, life insurance was important when I was younger and had family responsibilities, but fortunately my employer paid the premiums prior to retirement. But I would have paid for it in any case if it wasn't provided.

I bought a 12-month old used car last week, and couldn't believe the lengths the dealer went to to persuade me to buy GAP insurance. And of course the harder he tried, the bigger I realised his commission was going to be... And that is after the healthy margin the insurer would also make.

So where feasible, I prefer to carry the risk myself.

You win some, you lose some... just a personal choice.

Totally agree you either take the risk yourself or pass it onto someone else and pay the extra for their profit

 

[Langtoftlad]

Totally agree you either take the risk yourself or pass it onto someone else and pay the extra for their profit

Can you afford to replace a write-off van, or replace your entire house contents?
Equivalent to a premium of £90/yr, I'm comfortable paying that.

 

[mikebeaches]

Can you afford to replace a write-off van, or replace your entire house contents?
Equivalent to a premium of £90/yr, I'm comfortable paying that.

Just a question - do you have GAP insurance on your 'contents' cover?

And paying to cover a possible 'gap' in insurance - in the unfortunate case of a writen-off motorhome - is surely to suggest your motor insurer will not treat you fairly in the event of such a claim.

If I had to make a total loss claim on a 3 or 4-year old van, I wouldn't expect to receive a settlement that was sufficient to buy a brand new van, ie to be in a better position than if I hadn't had to make a claim.

But obviously we all have our own priorities. Apologies, not wanting to stir up any discourse, just surprised reading this thread to see how apparently popular buying additional gap cover is.

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[Langtoftlad]

Never heard of GAP for house insurance - doesn't mean it doesn't exist of course - but they do warn of under valuing your belongings & new for old cover... plus you set the level of cover.

Whereas, motor insurance is the other way around. You insure the vehicle and the insurer tell you what they will pay out.

As we know, a vehicle devalues by at least 20% (vat) as soon as you drive it off the forecourt & about 40+% after 3 years.

Two types of GAP:
Back to Invoice - what you paid three years ago generally won't buy you new now but at least you won't be out of pocket
or
Vehicle Replacement - pays whatever the difference between what your main insurer decides is market value and what you need to pay to buy the exact same vehicle.

Hence GAP I assume, covers the difference between market value and either what you paid, or cost of replacement.

I guess if motor insurance was either fair or like household then you could specify your cover ie £50k for a £50k MoHo but then premiums would be even more stratospheric than they are now.

 

[SpeedyDux]

Check the actual wording of your MoHo policy. A separate GAP policy may be unnecessary. The Comfort policy I had (until cancelled recently) promised to replace with a new vehicle of the same make and specification within 36 months /15,000 miles if repair cost exceeds 70% of list price or it is stolen and not recovered.

It will be interesting to see if they will offer the same cover on my new van at a similar premium.

 

[Jagtazman]

Check the actual wording of your MoHo policy. A separate GAP policy may be unnecessary. The Comfort policy I had (until cancelled recently) promised to replace with a new vehicle of the same make and specification within 36 months /15,000 miles if repair cost exceeds 70% of list price or it is stolen and not recovered.

It will be interesting to see if they will offer the same cover on my new van at a similar premium.

Thats ok for new but not 2nd hand you can get GAP to coverr second hand also.

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[Dare_Devil_Dennis]

GAP insurance seems to be todays "PPI" scam. The "GAP" has been created by the insurance industry where they will no longer cover new for old even as you leave the dealer forecourt with your new vehicle. The dealer will try very hard to scare you into buying this product because, like PPI he gets a massive commission.

I used Caravanguard for my new motorhome insurance and it included 2 years new for old replacement. In other words NO GAP! I was surprised at this and it clinched the deal for me.

 

[mikebeaches]

The subject of GAP insurance is an interesting one. So much so I decided to search this forum to see if it had been discussed previously - and indeed, I found seven threads on the very same subject since 2010.

And I think it's fair to say that each time there was a divergence of opinion.

It's also on my mind because I can't quite believe the cheek of it, having purchased a 12-month old used car last week for £22.5k. The quotation for 3 years GAP insurance was the bargain price of £355. But wait for it... there was also a £250 excess on any claim!!

Oh and as an aside, even though a 'used car', the sales invoice indicates that 20% VAT has been included in the purchase price. No different for a motorhome, though I accept in many cases the purchase price is much higher.

And I understand, as has been suggested, that I could go elsewhere and buy more competitive cover directly from an underwriter or broker. Also, that some buying vehicles on credit may either be required by the finance company, or at least feel they need it for peace of mind.

But at the end of the day, motor insurance should not be any different from house insurance, for example. Any reasonable claim made by the policyholder should be considered carefully and treated fairly by the insurer. I know that in reality, this may involve some haggling, but at the end of the day if the policyholder is dissatisfied with the final settlement offered and believes it to be unfair, they can go to the Insurance Ombudsman for assistance.

I also think the insurance industry has somewhat cynically created a product that simply plays on people's fears at a time when they are making a major purchase. Why don't they offer it for one year - answer, because the majority would not bother to renew after the first anniversary, realising it is not good vale for money.

We all have different views and priorities...

 

[Jagtazman]

Back to invoice is good value for money
Take it for 3 years if car written on a day before the 3 years expires you get the invoice value back ie what you paid not the market value.
In my case my car was 6 months old at time of purchase so i would be able to get another one of a similar age to purchase ie 6 months old rather than a 3-4 year old car
Only cost me £80 for the 3 year policy.
Sorry but that's a bargain

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[beltsandbraces]

just another sales bolt on, just like minor damage repair, tyre/wheel insurance and the ultimate being paint protection, in my opinion all dealer rip offs and in all the years I have been in the industry I have only heard of one person claiming from there GAP insurance. Bit like buying a 80 Quid microwave from currys with manufactures warranty and paying for a £20 2 year guarantee.
just my 2 penniths worth.

 

[mikebeaches]

Don't get me started on tyre insurance...

A couple of years ago I bought 2 tyres for the car from Kwik-Fit. An inclusive price was quoted to cover new valves, balancing etc and I was impressed with the value for Michelins.

However, subsequent close scrutiny of the invoice showed I'd been charged £8 per wheel for 12 months tyre damage insurance!

I was on the phone to Kwik-Fit in a flash to get my £16 refunded!

I think the tyres were only about £60 each (possibly slightly less because they were on a special offer), and needless to say the year passed without incident. £8 to insure a £60 tyre for accidental damage for 12 months - ridiculously poor value.