GAP insurance is a sensible product to own and can be much cheaper than you think. Remember to do your research and understand the features of each policy, but most importantly shopping around for quotes will help you decide whether buying GAP insurance is worth it for you.
How do I decide whether GAP insurance is right for me or not?
The first question to ask yourself is “could I afford to replace my car like for like if it was written off in a crash?” and the second question is “would it bother me if I couldn’t?”. Chances are that after all the stress of dealing with a crash, you won’t want to downgrade your car – especially if the prang wasn’t your fault. However, the cost of bridging the gap when your car has likely depreciated significantly since purchase can be too much to swallow. This is where paying a relatively small amount for GAP insurance is definitely worth it.
Say you buy a car for £18,000 then nine months later it gets written off and the insurance company only offer to pay you £13,000 for it – you’re £5k out of pocket. But not if you have a GAP insurance. They will bridge the £5,000 difference so you can get back in the road with a car that is not just like for like, but of the same standard you were driving when you took out the policy.
Are all GAP insurance policies roughly the same?
Every provider will be slightly different, and some may offer you additional benefits such as legal cover or a courtesy car. The important thing to remember when researching GAP insurance is that they vary wildly in cost. We all know that the margins on cars are really tight, which is why dealers work so hard to upsell finance and add-ons like GAP cover, as that is where they make their money. You can easily pay three or four times more to buy the same cover through a dealership, so don’t be pressured to sign-up there and then. They are selling exactly the same product you can buy online, just with a big mark-up.