So do people tend to go for replacement vehicle cover then instead of back to invoice? I bought my car through carwow so got roughly 15% saving.
Does that mean with replacement vehicle GAP that they would cover all of your options on the car?
Invoice GAP is about getting you back to the original invoice price that you paid to put the vehicle on the road.
Replacement GAP is about getting you up to the cost of replacing the vehicle at the time of claim with an equivalent to what you bought first time around. E.g. if you bought a brand new vehicle originally, it would be about getting you up to the cost of another brand new equivalent at the time of claim. If you bought a 12 month old with 10,000 miles on the clock, it would be about getting you up to the cost of replacing it with another 12month old with ~10,000 miles on the clock, equivalent at the time of claim.
The theory, is that with vehicle retail prices increasing over time, you'd stand to receive a higher payout from a Replacement GAP insurance policy than you would from an Invoice GAP insurance policy. This is compounded further if the original purchase was for a brand new vehicle involving discount off the full list price. In very simple terms, Invoice GAP would protect you only to the discounted price you paid whilst Replacement GAP would protect you to the higher full (and prone-to-further-increase) list price of the vehicle.
@S15THM I'd suggest that if you got a 15% discount off the list price, it should be Replacement GAP insurance for you all day long.
Is this for a new car, as my car insurance covers new for old for the first year. So I was not going to look for gap insurance until it's over a year old.
Most companies will only allow you to buy GAP insurance within a set period of time after taking ownership of the vehicle. Most are up 6-months afterwards. There's one or two who will permit you to buy cover up to 12 months afterwards. I don't think any will allow you to buy full Invoice and/or Replacement GAP insurance if you wait longer than 12 months though. Once you breach 12 months, you can only get a form of "Agreed Value GAP insurance" which would only cover you to what your vehicle was worth at the time you bought the GAP insurance policy.
The other thing is that with some companies I believe the GAP insurance premium increases the longer you take to purchase the policy.
One option is to wait until near the end of the first year and then purchase GAP insurance OR, buy a policy sooner from a provider that will allow you to defer the start date of the GAP insurance policy by up to a year from when the vehicle was first registered.
It's worth noting though that not all Car Insurance policies include replacement vehicle cover in the first year and of those that do, some of them have such stringent eligibility criteria that you have to meet at the time of any claim that, it would be quite difficult to actually get a physical replacement vehicle out of them with the potential of receiving a market value payout anyway. Thus, for anyone considering relying on their motor insurance in the first year instead of GAP insurance, you should:
- Make sure your motor insurance actually offers replacement vehicle cover within the first year
- Read the terms of their replacement vehicle cover carefully
- Buy GAP insurance for later years, within the first year. Don't go more than one year and miss out.
HTH
