Hi,
I have recently bought a Mondeo Zetec TDCI 2.0 (140) Hatchback (silver, 09 reg, franchised dealer, ex-demo, 5000 miles).
In another thread (www.honestjohn.co.uk/forum/post/index.htm?f=2&t=78...0) it has been strongly suggested to me that I should invest in GAP insurance (I turned down the 3 year/£399 GAP insurance offered by the dealer).
I am intending to get fully comp insurance (probably from Admiral for about £550-650), I'm not sure if this include like for like replacement in the first year.
I just wondered if anybody could please advise where the best place to go for GAP insurance would be. Am I better off taking the Ford insurance (even if my main insurance offer like for like in the first year, the Ford scheme offers delayed GAP insurance - starting after the first year)? Or would there be a better route to take?
Due to my personal situation I am not sure how long I will keep the car for. There is a chance (maybe 50%) that I will sell it within the next 18 months, if not I would imagine keeping it for 3-5 years.
I punched my details into the GAP quote tool on Autotrader and got a 3 year quote for £102 (which seems to be the total for the 3 years). They also mention Invoice insurance (which I assume is the full amount you paid for it) and Vehicle Replacement insurance for new/nearly new vehicles (not sure if an 09, registered in March, counts as nearly new).
Any advice here would be greatly appreciated.
Thanks.
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A friend of mine had reason to claim from click4gap and they were quite speedy, and appear to be good value. If I were you i'd be tempted to go for a 3yr £10k max payout policy Return to Invoice - £131 for a £15k car.
Like for like in the first year rarely applies to cars bought used.
Edited to add that if you're a Quidco sort of person, £22.50 cashback on that.
Edited by J500ANT on 20/09/2009 at 18:07
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purchase invoice GAP is the best way to go. If you were unlucky & it gets stolen or written off it pays you back the invoice price.
From one that had to claim on an purchase price GAP policy & oh it was a life saver
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... I turned down the 3 year/£399 GAP insurance offered by the dealer >>
Did the dealer/salesman by any chance tell you that the sales pitch was due to a requirement by the FSA?
If so, that was bunkum - read:
www.guardian.co.uk/money/2007/mar/10/motorinsuranc...e
"Commission-hungry salesmen are making new car buyers sit through sales pitches for insurance by falsely claiming that Financial Services Authority rules require it. ... ....
A spokesman for the FSA dismissed the claims. "A dealer who is registered with the FSA is certainly entitled to sell these products. However, these products are wholly optional, and there is certainly no obligation under FSA rules that car buyers have to be taken through these products before they can leave the showroom. If the buyer says they are not interested, that should be the end of it," he says.
Leaving aside the issue of the hard sell, is gap insurance worth it? .... ....
To help decide, see
www.honestjohn.co.uk/forum/post/index.htm?t=63668&...f
www.honestjohn.co.uk/forum/post/index.htm?t=63043&...f
www.honestjohn.co.uk/forum/post/index.htm?t=70846&...f
Having thought about the risk vs reward vs cost, my view is I don't need this type of insurance, and I have never bought it and have borne the risk myself.
However, almost everyone in the trade will tell you that you need it and/or that you must have it and/or that it is very cheap for the peace of mind it gives you etc.
Edited by jbif on 20/09/2009 at 18:54
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Did the dealer/salesman by any chance tell you that the sales pitch was due to a requirement by the FSA?
No he didn't, he just said that it would be a good idea as a new driver (the thing that made be suspicious was the "now or never" aspect that felt a bit high pressure). However, having read the old threads you posted (many thanks for those), the idea that the dealer insurance costs 2-3 times more certainly rings true.
As mentioned above Click4Gap is quoting £130 for 3 years return to invoice (max £10,000) and they are £230 for 4 years.
So at £399 the 3 years GAP from the dealer was over 3 times as much.
For the peace of mind I think I will go for GAP. I'll shop around a bit, but even if Click4Gap is the cheapest (I doubt anywhere else would be much cheaper), £130 seems reasonable (as you say, maybe not for risk vs reward, but just for peace of mind).
Thanks again for your help and thanks to everybody else who has helped.
I will be shopping around some more for quotes, but any further suggestions of good GAP providers, or any experiences with Click4Gap would be very appreciated.
Thanks again.
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I think you're on the right track.
Some quick sums. In three years time, your Mondeo will probably be worth about half what you paid for it: say a £7K gap. But in one year, the drop will only be about £3K.
So, assuming that your chances of totalling the car are about he same for each of the next 3 years, average payout on that policy would be about £4.5K. You're paying £130 for the cover, so the insurer makes a profit so long as no more than one insured person out of 35 gets a payout.
I'd guess that the actual odds of a payout are much less than that, so that even at £130 the insurer will make a tidy profit.
But OTOH, it's only £130: 1% of the purchase price, or the cost of two tankfuls of fuel, or aout 80p a week for the next three years. You're a relatively inexperienced driver at the wheel of a car which has cost you a lot of money, and this 80p a week will buy you loots of peace of mind about your investment.
So I'd suggest: just pay the £130, and stop worrying. :)
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Some quick sums. >>
So let me understand what you are paying for:
If your car is damaged and repaired, you are quite happy to continue using that repaired car.
But if it is written off, the insurance company pays you the purchase market value that enables you to buy a like for like replacement (see the helpful guidance*). In this case you think that the equivalent car is not good enough for you, and instead pay for GAP insurance because you want to revert to the situation you were in when you originally bought the car?
* "motor insurance: vehicle valuation"
www.financial-ombudsman.org.uk/publications/techni...l
www.financial-ombudsman.org.uk/publications/ombuds...m
www.financial-ombudsman.org.uk/publications/ombuds...l
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Did the dealer/salesman by any chance tell you that the sales pitch was due to a requirement by the FSA?
We just went through this when we renewed our Jazz - in fact we had sign twice, once we ordered and once when we picked up the car, that various finance packages, including GAP and paint protection, had been explained to us and that we'd declined them.
There was no hard sell and the guy explained that it's done to cover the dealer in case someone comes back having written off their car and complains that they weren't offered GAP etc. Seems fair enough to me, these days.
Their GAP offer listed at something like £500 but he offered it to us straight off for £350. I tols him I wasn't interested but anyway I could get it for £120 and he just moved on to the next item.
My view is that you can tell how unlikely it is that people claim on GAP if it's available for such a low pemium, so it's probably not worth it.
To the OP - it's most unlikely your insurance would replace your car like for like in the first year, that's usually only done for brand new cars, it's something that does catch out people who buy pre-reg (but otherwise new) cars.
Edited by Bill Payer on 20/09/2009 at 21:48
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I've never quite worked out why the FSA want to know if you have or havent taken an expensive paint protection package, unless they just like shiny cars?
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I've never quite worked out why the FSA want to know if you have or havent taken an expensive paint protection package unless they just like shiny cars?
...because there#s an insurance element - if the car's finish is damaged by one of the covered perils. then the underlying insurance should pick up the bill.
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There was no hard sell and the guy explained that it's done to cover the dealer in case someone comes back >>
As seems to be usual nowadays, actions are justified using the fear factor and everyone seem to be doing things "to cover themselves". (Similar to when banks, etc. quote the "FSA money laundering regs" to ask you to produce certain "absolutely essential" documents but when you challenge them to prove this, they find they cannot back it up).
>>... complains that they weren't offered GAP etc. Seems fair enough to me, these days. >>
Let them complain. The FSA absolutely does not require the dealer to tell you about these insurance policies. The motor trade has wither deliberately or due to a misunderstanding been using the FSA as an excuse to trot out their sales pitch.
it's most unlikely your insurance would replace your car like for like in the first year >>
"brand new for nearly new" or "like for like"?
it's something that does catch out people who buy pre-reg (but otherwise new) cars. >>
The entitlement is for an equivalent value pre-reg car, of equivalent use and age.
Edited by jbif on 21/09/2009 at 10:07
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Let them complain. The FSA absolutely does not require the dealer to tell you about these insurance policies.
I think that's right in theory, but in practice there's almost inevitably some discussion about finance, GAP, paint protection (which includes an insurance element) etc. If you respond in any way, then arguably you're into a discussion about those products.
Why give people the opportunity to complain in the future? For a business, much better to tie things up in one clear and simple document that clarifies matters in the event of a future dispute.
The FSA motor trader pages do say "we require you to give your customers"... tinyurl.com/mpa2gk
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The FSA motor trader pages do say "we require you to give your customers"... tinyurl.com/mpa2gk >>
The FSA requires all those who try to sell you certain financial products to give details as per FSA guidance.
However, The FSA does not require any motor trader to offer to sell you any insurance. If a motor trader decides to sell insurance as part of business, then as soon as the trader makes a pitch to sell insurance to you (or if you request to buy such insurance), then and only then is the trader obliged to follow FSA guidance on sale of such products.
The trader could advertise the fact that they offer insurance products and draw your attention to the fact that more information is available if you want, but make no attempt to sell it to you and there would be no breach of FSA guidelines. Once either they or you express an interest in the sale/purchase of the product, then all the FSA disclosure rules come in to play.
In some cases, such as the Aviva (Norwich Union) free 7 day Driveaway insurance, there is no FSA involvement. To quote Aviva: " .... dealers act as "introducers" and therefore do not have to be FSA regulated to provide Driveaway. ... Without having to worry about FSA regulations, the dealer can get on with the business of selling .... "
Edited by jbif on 21/09/2009 at 11:36
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but make no attempt to sell it to you
Which world are you in? Why would any motor trader NOT offer you one of their various insurance products?
Indeed the point that was made to me is that if you weren't offered GAP, you could come back later (presumeably after the car was written off at 2+yrs old and someone in the pub said "weren't you offered GAP") and complain about it.
Whether it's payment protection isurance, GAP, extended warranty (even the standard warranty on a used car will probably be insurance backed), paint protection etc - it's pretty unlikely that you could go through the process of buying a car these days unless it was off a bomb site and not come up against one or more of those things.
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I've just ordered a new (08) Focus this weekend and came up against these two subjects. The salesperson told that she (yes, she) had to inform me of these two products and let me know that I could purchase them if I wished. I declined on both counts and that was the end of the matter. No hard sell and nothing further to discuss.
No more difficult than declining extra topping on a pizza
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