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GAP Insurance

A vehicle gets written off every 90 seconds – is the value of your vehicle protected?

Give us a call to get your quote over the phone

0333 222 4509

What is GAP insurance anyway?

So, you’ve bought the vehicle of your dreams and you can’t wait to get out on the road. Have you thought about the fact that as soon as you drive your vehicle off the forecourt its lost value – whether it’s new or not? This means that if your vehicle is stolen or written off in an accident this can leave you with a shortfall of thousands of pounds compared to the cost of the vehicle when you bought it. This is why GAP insurance is so popular.

With Brightside not only can you get a great deal on vehicle insurance but we can also offer you cheap GAP insurance so you can recover the difference between your insurance payout and the value of the vehicle when you bought it. 

Perfect if...

  • You owe more than the vehicle is worth due to negative equity
  • You have taken out contract hire
  • You wouldn't be able to afford to replace your vehicle

How Gap insurance works

GAP insurance covers all kinds of vehicles – from new and used cars to vans, bikes and motorhomes. If you have a high value vehicle or a vehicle you wouldn’t be able to replace to the same standard as you have had then GAP insurance is worth considering. 

GAP insurance protects you from losing out if the market value of the vehicle is less than you paid for it. So, if you suffer a total loss, GAP insurance covers the difference between what the vehicle insurer pays out and what you paid for the vehicle meaning that you can still get your hands on your dream car even if it’s the second time around. The good news is that you can get GAP cover even if you’ve leased your vehicle, as well as if you’ve bought it.

An example of how GAP insurance works

Original value of your vehicle £35,000

Motor Insurer pays £20,000

GAP pays £15,000

So, it covers the difference between the motor insurance pay-out and the price you originally paid for the vehicle.

Types of GAP insurance

You can get different types of GAP insurance depending on how you financed your vehicle. The three main types of cover are below 

Return to invoice

Just as the name implies, this type of GAP insurance policy will cover the difference between the insurers settlement and what you originally paid for your vehicle, as long as you are able to provide the invoice confirming the value.*

Say for example you own a six-year old vehicle that’s worth £6,000. You take out a GAP insurance policy today and then in two years’ time, when your vehicle is only worth £3,500, it gets written off. Your GAP insurance will cover you for the £2,500 difference. You now have £6,000 to buy your next vehicle with.

*Invoice needs to be from a VAT registered motor dealer and less than 15 months old when you buy the GAP policy.

Finance and Contract Hire 

This is a great option if you’ve taken out a contract hire or finance agreement. Not many vehicle owners realise that the insurer often pays the finance provider direct, not you, when they settle a total loss.

This can leave you without a vehicle and a shortfall or debt. Say for example you own a six-year old vehicle that’s worth £6,000. You take out a GAP insurance policy today and then in two years’ time, when your vehicle is only worth £3,500, it gets written off. You could have a debt still of several thousand, but your GAP insurance will pay the balance leaving you debt free.

Agreed Value GAP insurance

This option is suitable if you have purchased your vehicle from a private seller or a vehicle dealer, or even if you got you vehicle on finance and managed to get a one-off deal on the purchase price.

With Agreed Value GAP Insurance, you won’t be out of pocket if the insurance payout is lower than the actual Glasses Guide retail price of your vehicle at the time you took out the policy. All of which will help to give you peace of mind that you will receive the same value to afford a suitable replacement.

Gap insurance is not suitable for everyone especially if you already have this covered as part of another arrangement for example if you have covered as part of your finance agreement or that you would happy to make up any shortfall yourself. 

However, there are many instances where GAP Insurance is something you should consider.

GAP is worth considering if...

You owe more than the car is worth due to negative equity.
This may have happened because:
you’re interest levels are high
the vehicle you bought has lost more money than expected 
the down payment for your finance agreement  was small (say 20%)
you chose a longer term finance agreement  ie 5 years 
your finance agreement includes a lump sum payment at the end known as a balloon payment. 
You've driven more miles than was stated in your agreement

You have taken out contract hire
If you have contract hire and the vehicle is written off or stolen, you might ow the contract hire company more than your insurance company will pay out. 

You wouldn’t be able to afford to replace your vehicle 
All new vehicles will depreciate in value the moment they are driven off the forecourt. As we have already said you need to consider GAP Insurance if you wouldn’t be able to replace your vehicle like for like.