Gap Insurance, Yes or No?

J4MMYz

J4MMYz

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YES ANOTHER QUESTION FROM ME I'M SORRY :p

I'm getting my car tomorrow, I have an excuse.



Right: I've paid my car out right, no finance, so would the GAP be any good to me? I got told it was £569 but he said he could do a deal for me, which my reply was I'm not too sure if I want it or not.

So - have you got GAP with your car bought outright?
Do you think it's worth it in my situation?


EDIT: I'm not too fond of it, since my car will be with me way after the GAP expires, so unless I keep RE - GAPing the car, which is a bit of money to do so, I'll always lose money if anything happens, obviously I don't plan on it happening, but I didn't plan for a year ago to have an accident because some idiot didn't check his mirrors and drive out in front of me, writing my car off... I did have GAP but the car was 4 months down the line so I got paid outright from the insurance, and the GAP only coughed up 119 quid so I in fact lost money.
 
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Good question Jammyz and one I'll be pondering when my car is built. I've never had it before on any of my cars as I tend to go with the better known insurance companies and have only once paid over 20k for a car before which was a brand new 225TT back in 2001). I think regardless of how you've paid for it the plus point of having gap as I understand it is that if it's gets written off or stolen (hope not!!!) the gap cover pays out the difference between second hand book value the insurance company will offer and what you paid for the car so you can just walk into the dealership (prob a different one after reading your earlier posts!!) and buy a brand new car.
 
J4MMYz said:
So - have you got GAP with your car bought outright?
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Yes.
J4MMYz said:
Do you think it's worth it in my situation?
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Yes, but not from Audi unless they match the market rate. I have 4 year gap with Gapinsurance123. £169 for 3 years, deferred for a year (current insurance gives 1 year from new replacement). £20k claim limit.

My thinking was I pay more than £169/yr in insurance and if the car is written off in the first 4 years I can get a new one to replace it - whatever the market value is at the time.
 
As above, you can get it far cheaper than Audi. I was quoted a similar price to you and I turned it down on the grounds I had a cheaper quote elsewhere. Audi said they'd see what they could do and after a few days came back with a "final" offer that was half the original price. Still more expensive than a similar offer elsewhere though, they said that they couldn't match that and they would advise I took that one instead!
 
As others have said, never take GAP insurance from the dealer, it's always far cheaper elsewhere.

As to whether to bother, in your case I can't see the point. AFAIK, it's intended to bridge the "gap" with finance if the car is written off whilst fairly new, as in this case the heavy initial depreciation can often mean the payout you get from your main insurance isn't enough to cover the outstanding balance on the finance. If you're paying outright then surely there's no point, unless it gives you some other benefit I'm unaware of?
 
Most insurance companies will replace like for like in 1st year.

I was something like £115 from ALA for Invoice Plus + for 3 years. Have a discount cod for 10% if also interested. They have no admin charges for change of address, number plate ect. They also allow you to transfer over the balance of the policy to another vehicle if you change before the terms completed.

But the way i see it is, lets say you pay £25k + an its written off after the initial year. You still get what you paid for the invoice back. So its a no brainer for me for the outlay of the extra policy.
 
Check your insurance policy - it may already pay out the full value for a new car in the first year, making gap insurance unnecessary.
 
leosayer1 said:
Check your insurance policy - it may already pay out the full value for a new car in the first year, making gap insurance unnecessary in the first year.
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I've corrected that for you. I have 3 years deferred by one year - which means if my car is written off between now and 1st March 2018, I get a new car. Not bad insurance for £169....
 
Vertigo1 said:
As others have said, never take GAP insurance from the dealer, it's always far cheaper elsewhere.

As to whether to bother, in your case I can't see the point. AFAIK, it's intended to bridge the "gap" with finance if the car is written off whilst fairly new, as in this case the heavy initial depreciation can often mean the payout you get from your main insurance isn't enough to cover the outstanding balance on the finance. If you're paying outright then surely there's no point, unless it gives you some other benefit I'm unaware of?
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My current A3 was purchased outright for cash. The main advantage of GAP insurance to me is that for the period of the policy (3 years) if the car is written off or stolen I get a replacement car of the same specification. My main insurers will pay out what the consider to be the market value and the GAP insurer will pay out the difference between that figure and the cost of buying a new car of the same spec. And all for £165 for three years with ALA. Good value for money to me.
 
Vertigo1 said:
As others have said, never take GAP insurance from the dealer, it's always far cheaper elsewhere.

As to whether to bother, in your case I can't see the point. AFAIK, it's intended to bridge the "gap" with finance if the car is written off whilst fairly new, as in this case the heavy initial depreciation can often mean the payout you get from your main insurance isn't enough to cover the outstanding balance on the finance. If you're paying outright then surely there's no point, unless it gives you some other benefit I'm unaware of?
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It's not so much to bridge the gap between insurance payout and finance, its to cover the difference between insurance payout and car value so i would see it as a definite yes. Just because the car is paid for, doesn't mean your not going to loose a s**t load of money should it be written off.

Si.
 
Psyman79 said:
It's not so much to bridge the gap between insurance payout and finance, its to cover the difference between insurance payout and car value so i would see it as a definite yes. Just because the car is paid for, doesn't mean your not going to loose a s**t load of money should it be written off.
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That doesn't make sense - any insurance policy should pay out what the car is worth - you should receive enough to replace it with a similar model.
 
An insurance policy will pay out the market value of the car. Without GAP, whether on finance or paid outright, thats all you'd get. With GAP, car insurance pays out market value and GAP pays additional money up to invoice (RTI GAP) or to the current cost to replace car with a brand new, same spec vehicle. (Vehicle replacement GAP)
 
You're contradicting yourself here. First you said that GAP is to cover the difference between insurance payout and car value, then you say that an insurance policy will pay out the market value of the car.

That's my point - a standard insurance policy will pay out enough to replace the car like-for-like, i.e. a used one of the same spec, age, mileage and condition. Some policies will replace old-for-new within a certain time-frame but, if not, then GAP insurance will do that too. It's generally used to stop you ending up in the car equivalent of negative equity, where the payout doesn't cover the outstanding finance.
 
Sorry, i meant the value to replace with a new, same spec model. I knew what i meant, my brain just didn't let me word it very well. :)

The point of GAP is so that you don't need to buy a used car, you can go straight to dealer and order another new one and not be out of pocket.

There have been a number of other GAP threads with examples of what they cover etc.

Si.
 
Vertigo1 said:
It's generally used to stop you ending up in the car equivalent of negative equity, where the payout doesn't cover the outstanding finance.
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No. I own my car outright. I have taken out gap insurance so that if my A3 gets written off in the first 4 years, I can walk into a dealer and order another one. Gap insurance for me is covering the difference between fair market value at the time of write off and buying a new car.

I am just about to take out gap on my latest purchase - a 2 year old low mileage Touareg - again something I own outright. This will cover me for 4 years to replace the car at write off time with a Touareg that is 2 years old and has low mileage.

An alternative way of looking at it is that it is an extra premium to turn a fair-value insurance (i.e. my motoring insurance) into a new-for-old (or at least an as-new-as-it-was-when-you-bought-it) policy like my home insurance is.
 
audi upgrades
PS. There are a number of different types of gap policies, depending on what gap you are insuring (difference between fmv and outstanding finance, difference between fmv and repurchasing...)
 
Standard insurance policy will pay out bottom trade book value for the car.

In most cases this will be below what you need to replace it like for like, condition wise.
 
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I'd always get GAP as per veeeights point - if it's written off I want a policy to help me get the same car with the same spec back on my drive.

I personally think any price under £250 for GAP under written by a reputable insurer and regulated by the UK FCA is worth getting. I saw a policy from Inchcape that was regulated by the Portuguese version of the Financial Conduct Authority. Not sure how much I'd trust that.....
 
It's like the BBC Christmas schedule talking about GAP - lots of repeats!
 
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Vertigo1 said:
You're contradicting yourself here. First you said that GAP is to cover the difference between insurance payout and car value, then you say that an insurance policy will pay out the market value of the car.

That's my point - a standard insurance policy will pay out enough to replace the car like-for-like, i.e. a used one of the same spec, age, mileage and condition. Some policies will replace old-for-new within a certain time-frame but, if not, then GAP insurance will do that too. It's generally used to stop you ending up in the car equivalent of negative equity, where the payout doesn't cover the outstanding finance.
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In my case the chance of finding a second-hand car of the same spec as my current car is nil. So I would have to order a new car and for £165 I get three years cover that means I can do just that at no cost to me. I would much rather wait for a few months for another brand new car than have to live with a second-hand car that was not to the spec I wanted. £165 extra on a £30k car. Good value for money I would say.
 
As I posted in the other thread, what happens while you're waiting for the new car? Will the GAP insurance (or the main policy if new-for-old during the first year) pay out for a courtesy car for the 3-5 months it takes for a new one to be built?
 
Provision of a hire car is nothing to do with GAP Insurance - they don't get involved until the main insurer declares a total loss - then they pay out. You don't pay a £160 GAP premium to get a hire car for an indefinite period while your new car is ordered and built ;) - their involvement ends once they hand over the GAP settlement cheque - you then toddle off and order your new car.


Provision of a hire car in the event of theft/total loss is down to the main insurer - some no hire car in the event of theft, some only provide 14 days, some 21 days, some until the settlement cheque is issued.

Check your individual policies for this detail.
 
Understand what you're saying but that looks like a recipe for a real nightmare to me. So your car gets written off and the main insurer gives you a settlement based on the value of the car at that time. Ah but you have GAP insurance which allows you to order a brand new one and they'll make up the difference. So you order your new car and it's a 5 month wait. Can't see either insurer giving you a courtesy car for this period at all. The main insurer will say they've fulfilled their obligations by paying out what the car was worth, end of. The GAP insurer won't provide a courtesy car for that duration either. So you'll be left funding your own temporary transport for the duration which won't be cheap.
 
Vertigo1 said:
So you'll be left funding your own temporary transport for the duration which won't be cheap.
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That will be true, irrespective of whether you have GAP or not, and want a new replacement car?

'Twas always thus?

(I suppose you could always investigate a new insurance policy, to cover you for alternative transport in the event of having to wait for a new car :p )
 
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A slight get out is if you have Audi Ensurance, and if you car is involved in a total loss scenario, AND it can be established early on that the other party is to blame -

Audi Ensurance will seek to get you an equivalent hire car to your own, but charge the other partys insurer for it.....

.... this is why Insurance premiums are so ******' expensive !!!!!!!
 
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veeeight said:
That will be true, irrespective of whether you have GAP or not, and want a new replacement car?

'Twas always thus?

(I suppose you could always investigate a new insurance policy, to cover you for alternative transport in the event of having to wait for a new car :p )
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Oh yeah, it's great that you can get a brand new replacement to the exact spec of the old car, I'm just saying that it's potentially not all roses and the downside is that you could be stuck funding alternative transport for months.
 
Vertigo1 said:
Oh yeah, it's great that you can get a brand new replacement to the exact spec of the old car, I'm just saying that it's potentially not all roses and the downside is that you could be stuck funding alternative transport for months.
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In my particular case that would not be a problem for two reasons. 1) I'm retired so I don't need a car to get to work every day and 2) My wife has a very nice Audi A1 which I'm sure she would be happy for me to use when I needed a car. It would mean re-learning to drive a manual but I'm sure that would not be a problem. So for me £165 very well spent. Brand new A3 at no cost to me.
 
Oh yeah it's great value for what you get - a new car to replace your old one - but I wonder whether many people realise they could be without a car for a while.

Oddly, as a company car driver, I'm in a similar situation. Were mine to be written off, the insurance payout would simply go to the lease company and that would be the end of it. A new lease would then be arranged for a replacement car but I'd also be waiting months for a factory order again, during which time I'd need some other transport.
 
Vertigo1 said:
Oh yeah, it's great that you can get a brand new replacement to the exact spec of the old car, I'm just saying that it's potentially not all roses and the downside is that you could be stuck funding alternative transport for months.
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Or you could just take a different car that is also new and of similar spec. but in stock....

I'd rather have the problem of finding transport for a few months than having to find several thousand to replace my written off car with a new one.
 
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Some years ago, before GAP insurance was available my Audi 80 was written off in Germany. A young lady in a Fiesta drove in to me at around 40 mph and pushed me into the car in front. She was busy chatting to her passenger and didn't notice that I was stopped at traffic lights.

I had to fly home and the next day I went to my Audi dealer and ordered a new car. For the interim period we arranged for me to buy a second hand Audi similar to the one written off and the dealer agreed to buy it back from me at the price I paid him for it when my new one arrived.
 
audi upgrades
+1 for GAP - it will ensure you can put yourself in the position you were when you were purchasing the car, ie it effectively compensates you for wear and tear if the worst comes to the worst :)
 
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