Gap insurance?

[veeeight]

I quote, from Post #18 (my, that was a long time ago)

GAP Insurance, like any other non-mandatory statute insurance, reflects personal circumstances, and your outlook on risk.

The choice of whether to buy life insurance, unable-to-work insurance, travel insurance or any other sort of insurance etc. depends on your personal circumstances, and your aversion to risk. Nothing more, nothing less.

Two very useful previous threads (for those considering GAP Insurance)

http://www.audi-sport.net/vb/new-a3-s3-8v-chassis/201513-gap-insurance.html

http://www.audi-sport.net/vb/new-a3-s3-8v-chassis/197614-gap-insurance-again.html

 

[h5djr]

I quote, from Post #18 (my, that was a long time ago)






Two very useful previous threads (for those considering GAP Insurance)

http://www.audi-sport.net/vb/new-a3-s3-8v-chassis/201513-gap-insurance.html

http://www.audi-sport.net/vb/new-a3-s3-8v-chassis/197614-gap-insurance-again.html

Personally I think of GAP insurance in a slightly different way. I currently have Vehicle Replacement on my existing 8P and will almost certainly take out the same for my new 8V. I look at it more as a gamble...

I pay out say £150 to cover my £32,000 car. If if gets written off or stolen during the first year my insurance company will provide me with a brand new car of the same model and spec as part of my normal insurance.

If the same thing happens in year 2 or 3 again I will get a brand new car of the same model and spec for £150. If nothing happens I 'loose' £150. Not a big amount compared with the price of a new car.

 

[royalsteve68]

Thanks.. I'm not convinced yet... effectively I am paying £45-50 a year on the off chance that my car is stolen and not recovered or has over 60% of it's value in damage. Plus it only covers the difference between Insurance settlement and Invoice figure as far as I see.
It's a small amount and I'm warming to the idea!

and/or depreciation especially after a year your car insurer will likely give the glasses guide trade in price back and with some insurers who might not get the options covered either

if your fully loaded s3 is worth £40K with options (minus some things like delivery charges) and its written off in year 2, your insurer my give you as low as £20.5K back, gap insurer will give you back £19.5K

that's the way I read it

check on ala and gapinsurance123 as they make it clearer

 

[PilotAudi]

Thanks RS that's my understanding . As posted many of us plan our expected depreciation over 3 years. Gap it seems could potentially put you back in a better position with a year 2 or 3 total loss. Not sure I would need to be in a better position and paying £50 a year for essentially a £3000 insurance risk that appears unlikely to happen to many of us. Jury is still out !

 

[royalsteve68]

Personally I think of GAP insurance in a slightly different way. I currently have Vehicle Replacement on my existing 8P and will almost certainly take out the same for my new 8V. I look at it more as a gamble...

I pay out say £150 to cover my £32,000 car. If if gets written off or stolen during the first year my insurance company will provide me with a brand new car of the same model and spec as part of my normal insurance.

If the same thing happens in year 2 or 3 again I will get a brand new car of the same model and spec for £150. If nothing happens I 'loose' £150. Not a big amount compared with the price of a new car.

yep that's the way I see it - if we were being pedantic then the only thing not covered by vehicle replacement gap is the delivery charge and admin charges - I think

 

[royalsteve68]

just checked my insurer swiftcover who included a new for old in their policy

I could defer my gap but not sure ill bother - covered twice lol, now that IS being risk adverse

 

[royalsteve68]

It's like the old joke... I've had Life Insurance for 67 years and I haven't died yet!
With all insurance it's down to risk and perceived risk. I reckon my new car with an Invoice price of c £37500 (£34 after discount) will at end year 1 be worth 28k year 2 24k year 3 21k... Year one is fine all covered by Car Insurance if there is a total loss.

In year 2 if insurance offers a 25k and year 3 18k I am actually paying nearly £100 to cover an unlikely loss of £3000 as normal depreciation is already calculated in my purchase/disposal strategy.

Comments welcomed and yes Mr ate I do listen.

But you have missed the point as regardless of the year you woukd get back what you paid even after year 2 or 3

 

[RVP20]

So let me get this right....if you take out gap insurance for a brand new car for the 3 years then really one year is 'wasted' as you automatically get free gap insurance with the cars insurance company.( if that's what they offer)

So in this case it would be beneficial to take the 3 year policy out AFTER the 1st year of owning the car therefore you get 4 years for the price of 3......if you catch my drift?! 👍

 

[royalsteve68]

So let me get this right....if you take out gap insurance for a brand new car for the 3 years then really one year is 'wasted' as you automatically get free gap insurance with the cars insurance company.( if that's what they offer)

So in this case it would be beneficial to take the 3 year policy out AFTER the 1st year of owning the car therefore you get 4 years for the price of 3......if you catch my drift?! 👍

nope to get rti or vehicle replacement on a new car you have to buy it either 30 or so days before or up 180 days after receiving the car. with some insurers, you can defer the start up to 12 months

 

[PilotAudi]

But you have missed the point as regardless of the year you woukd get back what you paid even after year 2 or 3

Not sure I've missed the point RS.
I have a financial plan to run Car for say 3 years . I save to cover replacement cost in 3 years time. Say £500 a month. Each year I have £6000 so at any point after year one I have insurance value of car + £6000 ( first year savings ) + x additional months to the total loss date. At 24 months I have 6k + 12 x £500 = 12k plus the insurance settlement say 21k which gives total of 33k available to buy replacement ( I paid 34k new)

It's different to everyone but I'm still not convinced I need it.

Essentially gap covers depreciation losses which owners really should be budgeting for anyway IMHO .

 

[RVP20]

nope to get rti or vehicle replacement on a new car you have to buy it either 30 or so days before or up 180 days after receiving the car. with some insurers, you can defer the start up to 12 months

I thought it was free with an insurance company therefore no need to put chance until the 2nd year of ownership?

 

[h5djr]

So let me get this right....if you take out gap insurance for a brand new car for the 3 years then really one year is 'wasted' as you automatically get free gap insurance with the cars insurance company.( if that's what they offer)

So in this case it would be beneficial to take the 3 year policy out AFTER the 1st year of owning the car therefore you get 4 years for the price of 3......if you catch my drift?! 👍

The problem with that theory is that all companies offering GAP insurance require you to take out the policy between 90 and 180 days from when the car is new. You are actually paying for just 2 years cover with a 3 years policy or 3 years cover on a 4 year policy. The fact that they get the money 1 year before the cover actually starts helps to keep the prices down. A three year policy without the 1 year delayed start will cost you more because you will be paying for 3 years cover rather than 2 years.

 

[PilotAudi]

I think you have to buy it within 180 days but it doesn't start until 365 days after first registration.


Let's try to be clear! - If you buy a 2 year policy from First Reg + a year (i.e 1 Mar 2015 -1 Mar 2017) It is just that a 2 year Policy. The first year (giving 3 years protection) is from your Insurer (if they provide it most/all do I believe!).

 

[Daveotto]

I think you have to buy it within 180 days but it doesn't start until 365 days after first registration.


Let's try to be clear! - If you buy a 2 year policy from First Reg + a year (i.e 1 Mar 2015 -1 Mar 2017) It is just that a 2 year Policy. The first year (giving 3 years protection) is from your Insurer (if they provide it most/all do I believe!).

Correct, that's exactly what I have done but with a 3 year policy, purchased sept 13, year one with car insurance company, 3 years gap cover starts from sept 14, so total length of cover is 4 years

 

[dieselguy]

So basically if you have Gap insurance then you would WANT your car to be stolen just before year4 so that you get a new car!
It will pay the depreciation.... Call me cynical but I would think there number of cars written off just before the end date is higher than the national average.

 

[h5djr]

So basically if you have Gap insurance then you would WANT your car to be stolen just before year4 so that you get a new car!
It will pay the depreciation.... Call me cynical but I would think there number of cars written off just before the end date is higher than the national average.

You could well be right. Stolen and tourched as well!!

 

[PilotAudi]

So basically if you have Gap insurance then you would WANT your car to be stolen just before year4 so that you get a new car!
It will pay the depreciation.... Call me cynical but I would think there number of cars written off just before the end date is higher than the national average.

As in post hash 130 that's about the only benefit as I can see it.

 

[Psyman79]

Not sure I've missed the point RS.
I have a financial plan to run Car for say 3 years . I save to cover replacement cost in 3 years time. Say £500 a month. Each year I have £6000 so at any point after year one I have insurance value of car + £6000 ( first year savings ) + x additional months to the total loss date. At 24 months I have 6k + 12 x £500 = 12k plus the insurance settlement say 21k which gives total of 33k available to buy replacement ( I paid 34k new)

It's different to everyone but I'm still not convinced I need it.

Essentially gap covers depreciation losses which owners really should be budgeting for anyway IMHO .

Not sure i really understand your logic there.
Yes, everyone who buys a new car has to accept depreciation as a factor, but using your hypothetical situation where lets say after 2 years your car is sadly written off. You're saying you would rather spend £12k of your own savings rather than claim on a GAP policy that cost you £150 in order to fund a replacement car. With GAP you'd still have £12k and a shiny new car.

 

[PilotAudi]

So £150 to insure against an unlikely loss.

 

[Psyman79]

Pretty much. But rather that than a £12k loss

Just put 500 less miles on your car and that'll cover it.

 

[royalsteve68]

My insurance company replaces with brand new for up to 2 years, so GAP is not really necessary for me.

Working in Insurance, I only advise GAP to my clients if they are financing a large amount. At the end of the 2 years new for old period, how much finance will be left on the car? If you still owe more than the current value of the car, then GAP is for you.
On the other hand, take out GAP as an added insurance, so that if you ever write off the vehicle, regardless of how much is owed, you will get a brand new car even in year 3. Is that worth 3 years of premium? That is totally down to individual choice.

In short GAP works in 2 ways depending on your circumstances:-
1) It offers protection to those who owe a lot of money on the car and the finance doesn't depreciate as fast as the car is depreciating
2) For those who don't owe finance, your effectively paying for new for old for the lifetime of your ownership, which some people really like.

Just as a non technical point, retailers inc car dealers and manufacturers don't sell anything that doesn't make them s**t loads of money and leaves them with tiny amounts of risk!! Whether that be car GAP insurance or extended warranties on fridge freezers or washing machines etc. I personally am very wary of accepting any form of insurance or warranty from any company who's main business is NOT insurance!!!

Thats my 2 pence worth anyway, and I will not be paying for GAP insurance.

I just don't get that logic. I'm glad you aren't advising me. £150-200 wasted on insurance against a potential new for old policy that effectively will be worth £15K for me in year 3 (my car cost £40395K rrp), so in year 3 my insurer pays me £20K, gap pays £20395...

its not hard to understand. people who go on about deprecation are completely missing the point as in reality its totally irrelevant, especially with a vehicle replacement policy.

I paid £40K
year 1 worth / car insurer pays £30K, I get £40K back
year 2 wworth / car insurer pays £20K, I get £40K back
year 3 worth / car insurer pays £15K, I get £40K back
year 4 worth / car insurer pays £10K, I get £35K back (as the gap limit on most policies is £25K)

 

[PilotAudi]

Still don't get it steve. Bit like life insurance. . I hope not to die in 2/3 years time. And don't intend paying huge amounts of money just in case.

Paying cash on Saturday so no issue with value. /loan issues .

We have. 180 days to think about it!

 

[titleist007]

I just don't get that logic. I'm glad you aren't advising me. £150-200 wasted on insurance against a potential new for old policy that effectively will be worth £15K for me in year 3 (my car cost £40395K rrp), so in year 3 my insurer pays me £20K, gap pays £20395...

its not hard to understand. people who go on about deprecation are completely missing the point as in reality its totally irrelevant, especially with a vehicle replacement policy.

I paid £40K
year 1 worth / car insurer pays £30K, I get £40K back
year 2 wworth / car insurer pays £20K, I get £40K back
year 3 worth / car insurer pays £15K, I get £40K back
year 4 worth / car insurer pays £10K, I get £35K back (as the gap limit on most policies is £25K)

Thanks for commenting and the points you raised are very valid and correct. I do though firmly believe my post was pretty balanced in the information I covered, stating that it is down to individual choice and also down to your own personal circumstances.

Your point about being glad I'm not advising you is understandable and I don't take offence by it, but it does highlight the main differences between personal and commercial insurances.
I advise mainly commercial insurance for businesses etc and it is pretty much accepted commercially that nothing is insured new for old, you are basically put back into the position you were at prior to your loss.
If you have a fast depreciating asset like a car, you may owe more in finance than the car is worth, so GAP insurance plugs that gap, for want of a better expression, and If that was the case, I would hastily advise it.

The modern GAP policies go above and beyond the reinstatement of your current asset, and they insure you new for old. Now for many people this is wonderful and is pretty good value, but for others it is deemed unnecessary and not worth the £150-£200. It really is different strokes for different folks.

 

[titleist007]

Still don't get it steve. Bit like life insurance. . I hope not to die in 2/3 years time. And don't intend paying huge amounts of money just in case.

Paying cash on Saturday so no issue with value. /loan issues .

We have. 180 days to think about it!

My point entirely, Steve is one side of the fence and Pilot is the other.

I am warming to the idea though Steve, the figures of £150 over 3 years do make vehicle replacement GAP seem very tempting.

 

[PilotAudi]

I tend to have a reputation for considering things . Anyone into Myers Briggs I'm ENTJ

 

[royalsteve68]

Thanks for commenting and the points you raised are very valid and correct. I do though firmly believe my post was pretty balanced in the information I covered, stating that it is down to individual choice and also down to your own personal circumstances.

Your point about being glad I'm not advising you is understandable and I don't take offence by it, but it does highlight the main differences between personal and commercial insurances.
I advise mainly commercial insurance for businesses etc and it is pretty much accepted commercially that nothing is insured new for old, you are basically put back into the position you were at prior to your loss.
If you have a fast depreciating asset like a car, you may owe more in finance than the car is worth, so GAP insurance plugs that gap, for want of a better expression, and If that was the case, I would hastily advise it.

The modern GAP policies go above and beyond the reinstatement of your current asset, and they insure you new for old. Now for many people this is wonderful and is pretty good value, but for others it is deemed unnecessary and not worth the £150-£200. It really is different strokes for different folks.

I was joking re: that and didn't mean it to sound nasty...oops I failed. If you know me you will know I am not being that serious and forums and emails can be a bit impersonal.

anyway, insurance a personal thing but for me its a no brainer - if it was 10x the cost I am sure my view would be very different - and im in the moderate risk taker category according to my financial advisor (that means sensible / bit of a chicken - delete as appropriate)

 

[royalsteve68]

My point entirely, Steve is one side of the fence and Pilot is the other.

I am warming to the idea though Steve, the figures of £150 over 3 years do make vehicle replacement GAP seem very tempting.

Its up to you though as I am no expert. Not sure which one to go for - ala seem to get positive reviews but heard nothing about gap123 /directgap

 

[Flibble]

I think you have to buy it within 180 days but it doesn't start until 365 days after first registration.


Let's try to be clear! - If you buy a 2 year policy from First Reg + a year (i.e 1 Mar 2015 -1 Mar 2017) It is just that a 2 year Policy. The first year (giving 3 years protection) is from your Insurer (if they provide it most/all do I believe!).

Most but not all - definitely check that yours does before you defer cover!

 

[titleist007]

I was joking re: that and didn't mean it to sound nasty...oops I failed. If you know me you will know I am not being that serious and forums and emails can be a bit impersonal.

anyway, insurance a personal thing but for me its a no brainer - if it was 10x the cost I am sure my view would be very different - and im in the moderate risk taker category according to my financial advisor (that means sensible / bit of a chicken - delete as appropriate)

Steve, you didn't sound nasty, and I honestly took no offence by it. I know what you mean though, you just write and don't realise how it will come across, I do it all the time.

I insure a lot too, but my FA would describe me as mental, as I have no issues with risk at all!! Probably in the wrong job. I will look at GAP though, I am being slowly pursuaded that £150 isn't a lot of money just in case! I've never had a car written off or stolen in my life, which is why I hesitate!!

 

[Andy1608]

I'm with ALA, £128 for 3 years return to invoice + policy

 

[royalsteve68]

I went with ala and mines £219 discounted from £275 for 4 years as they matched gap123 but not the 5 years

impressed with their service.

I went with ala as its underwritten by a uk insurance company, whereas gap123insurance and directgap use a Gibraltar based insurance company

they were helpful - heard zilch from gap123

don't charge for most changes, gap123 do

I found what looked like a lot of independent reviews, annoyingly gap123 searches just showed their site which really annoyed me - clearly someone is paying a lot of money to google etc and also the reviews on the gap123 site are fake

 

[royalsteve68]

Most but not all - definitely check that yours does before you defer cover!

id be careful deferring cover as even if it states new for old there is no guarantee they will honour. I know its in the terms but its not 100% guaranteed

 

[dannyAshcroft89]

I ended up with no car and had to pay a further £2500 because I didn't take gap insurance!
Never again would I not take gap again!

 

[h5djr]

I went with ala and mines £219 discounted from £275 for 4 years as they matched gap123 but not the 5 years

impressed with their service.

I went with ala as its underwritten by a uk insurance company, whereas gap123insurance and directgap use a Gibraltar based insurance company

they were helpful - heard zilch from gap123

don't charge for most changes, gap123 do

I found what looked like a lot of independent reviews, annoyingly gap123 searches just showed their site which really annoyed me - clearly someone is paying a lot of money to google etc and also the reviews on the gap123 site are fake

I've just got a quote on the ALA website for £188 for return to invoice for £32000 car £20,000 claim limit over 3 years.

I also see that ALA offer Alloy wheel, Scratch and Dent and Excess Cover. I was given a leaflet by my dealer about the Audi Smart Repair and Alloy wheel cover and was told the normal price was £899 for three years and they would do it for £599.

With ALA I could get the Gap Insurance, Alloy wheel, Scratch and Dent and Excess cover for the same £599. Interesting.

 

[royalsteve68]

I've just got a quote on the ALA website for £188 for return to invoice for £32000 car £20,000 claim limit over 3 years.

I also see that ALA offer Alloy wheel, Scratch and Dent and Excess Cover. I was given a leaflet by my dealer about the Audi Smart Repair and Alloy wheel cover and was told the normal price was £899 for three years and they would do it for £599.

With ALA I could get the Gap Insurance, Alloy wheel, Scratch and Dent and Excess cover for the same £599. Interesting.

it is good. remember to search as they will better than price match as for me they price matched gap123 at 229 and then bettered it by an additional 20% of the difference (als were 275)

sometimes its best not to get the cheapest eg I have always had building and contents insurance from nationwide building society. I can get it cheaper like eg Tesco but ive had no problems with 3 (1 average, 2 small) claims with nationwide over the past 15 years whereas ive heard a lot of horror stories from cheaper providers

I did look at the scratch and dent but wasn't sure whether to get it

 

[lloydie1994]

Just had another look at ALA can you defer the policy went through to buy it and you can select a date in the future but was sure it said you couldn't defer somewhere, i can get it even cheaper with their 20% price match.

 

[royalsteve68]

Just had another look at ALA can you defer the policy went through to buy it and you can select a date in the future but was sure it said you couldn't defer somewhere, i can get it even cheaper with their 20% price match.

you can defer it by 12 months. id check carefully though. I didn't bother so did it from day 1 as ive just wasted a small amount on what seems like double cover for the 1st year, but I don't trust insurance companies to honour their contracts without a fight

 

[royalsteve68]

I ended up paying 219ish at ala for £25K and 4 years on a £40395 rrp car - price matched gap123 plus an extra 20% of the difference between £275 (ala) and £229 (gap123)

 

[titleist007]

I ended up paying 219ish at ala for £25K and 4 years on a £40395 rrp car - price matched gap123 plus an extra 20% of the difference between £275 (ala) and £229 (gap123)

I went to sign paperwork yesterday and the dealer offered GAP for £150 for 3 years with Audi for £25k. Because I'm going to have to insure with Direct Line, I only get 1 yr replacement, so GAP now becomes an issue.

Losing the extra yr new car replacement made it a no brainer at £150, so I took it. Converted man? or was the dealer in the right place at the right time? Best insurance I could get on the car was £350.

 

[Andy1608]

GAP is great if you need it but waste of money if you don't. No different to every insurance you get really. Personal choice if you want to take the risk or not, I personally have this time with mine.