Gap Insurance

Honest John Back Room » Motoring discussion
What is life like with your car? Let us know and win £500 in John Lewis vouchers | No thanks
View Threaded
Sat 29 Sep 2018 06:24
Gap Insurance - Wee Willie Winkie

When negotiating a deal on my 1 year old Octavia, the dealer offered gap insurance for the princely sum of £399, then 'reduced to £299. I obviously declined, but guess I should sort out some kind of cover. Policies seem to be much of muchness between random companies on the net, return to invoice insurance seems the best bet. However, I can't help thinking I don't really know what I'm looking at.

Does anyone have any words of wisdom, or recommendations for Gap Insurance?

Thank you!

Reply | Report as offensive | Link
Sat 29 Sep 2018 08:17
Gap Insurance - SLO76
Add-ons like this are big earners for dealers and sales staff. I was often criticised for not pushing GAP insurance in particular because it was a poor product back in the 90’s, all it covered was the difference between any insurance payout and your outstanding finance balance. Unless the car was written off shortly after buying and you’d only paid a small deposit it was largely useless and would never pay out yet we were pushed to sell it to everyone even the self employed who again were largely excluded in the small print.

I could never sell a poor car or product, this is largely the reason why I left the industry as it was increasingly becoming reliant on add-on finance products such as GAP etc for profit rather than selling the cars themselves which I enjoyed.

That said and from what I understand GAP is a much better product today which can be bought direct online from the firms themselves for a fraction of the cost of the dealer and certainly has value. I personally only take the insurance I’m legally obliged to have on my cars, possibly a breakdown policy with that but otherwise I find insurance a waste of money. In 24 years of driving and owning cars I’ve never been in a position where it would’ve paid out. Have you?
Reply | Report as offensive | Link
Sat 29 Sep 2018 09:33
Gap Insurance - Wee Willie Winkie

Good point. I haven't, no.

I put a 30% deposit in. I wonder if the real benefit of gap insurance is, like you say, when only a small deposit is used and therefore negative equity is more likely?

Reply | Report as offensive | Link
Sat 29 Sep 2018 09:37
Gap Insurance - daveyjp
I have a simple philosophy towards GAP. If I need finance Gap I'm borrowing too much or paying the loan off too slowly.

If I want return to invoice Gap I have more money than sense.

Reply | Report as offensive | Link
Sat 29 Sep 2018 13:03
Gap Insurance - RT

For those who don't borrow to buy a car - a write-off at, say, 18 months will get a low payout from the insurers and GAP can be used to make up the difference to new cost - it also puts the GAP insurer against the car insurer to argue the market value, rather than owner having to do it.

Remember that many car policies include new-for-old for the first year - so GAP sholuldn't start until that expires.

Reply | Report as offensive | Link
Sun 30 Sep 2018 16:46
Gap Insurance - Smileyman

I purchased a brand new car last year, my approach is to buy new(ish) then run long term. I expect to keep the car 7 - 10+ years, to give myself more protection against financial loss in the event of a write-off incident in years 2 -5 I purchased GAP cover. Found a policy advertised on this (HJ) website, much cheaper than getting from the dealer.

I must admit for white goods I never buy breakdown cover, my approach is the sum of the premiums paid for all the white goods would come to a substantial sum of money, it would be cheaper to replace at least one or two "early" failed items. The difference with the car is that I have only the one, a failure would have a bigger (negative) impact on my life and of course the cost price is substantially higher in absolute terms and as a % of income.

Reply | Report as offensive | Link
Sun 30 Sep 2018 18:58
Gap Insurance - Terry W

In 45 years of owning cars (new and s/h) I have never written one off or had a non recovered stolen. Gap insurance is simply a means of parting a naive punter from their cash to cover a very low risk.

With household appliances I never take out insurance. Generally failure occurs within the first year and almost always covered by manufacturer warranty. We also have 10+ items around the house (TVs, freezers,oven, hob, dishwasher, washing machine, laptops, phones, tumbler dryer etc etc. The failure of one or two in years 2-5 would cost less than the combined cost of extended warranties.

Reply | Report as offensive | Link

We give you the low down on how to save on insurance, little-known tricks and tips, what insurance groups mean and how to use insurance aggregators to beat insurers.

Insurance group finder and how to save on insurance

Our honest used car pricing is a little bit different to all the others. You can get to our values through make or model - you don’t have to follow a prescribed route. Plus, it’s live, which means we can react to changes in the market quicker than any printed price guide.

Honest Used Car Prices