GAP stands for Guaranteed Asset Protection.
You are insuring the difference in the amount the insurance company will pay out if your new car is stolen or written off and what the finance company, which funded your new car, will expect to be paid to settle the outstanding finance. Put another way it is the difference between what the insurance company pay out and the settlement figure from the finance company.
For example, you get a new lease car and three days later it is stolen and never recovered. Let’s say the insurance company will pay £17,000, but the finance company say the settlement figure is £20,000. So you have to pay the finance company £20,000, but your insurance company will only pay out £17,000, so you would need to find the balance, that is £3,000.
GAP insurance covers you for this eventuality. And if you find yourself in the unfortunate position of having your new car stolen or written off, the GAP insurance will cover you for the difference between what the insurance company will pay out and what the finance company expect to receive from you.
The cost of GAP insurance is typically around £199 for the term of the lease and is payable at the start of the lease. And the good news is that there is the option to pay in ten monthly instalments by direct debit, so that softens the impact a little.
So that’s it, GAP insurance explained, here’s some FAQS, but if you still have questions please contact our team.
What is GAP insurance?
GAP insurance is an insurance product specifically for new cars. The value of a new car soon after it is leased drops to a level where it is less than the amount required to settle the finance in the event of an insurance write off, or if the vehicle is stolen. GAP insurance covers the lessee for this difference.
Why is GAP insurance needed?
GAP insurance is there to provide you with cover should your vehicle be seriously damaged or stolen. If your new car is written off by your insurance company in the early stages of your contract, the value of the car could be less than the amount required to settle the finance on the lease. GAP insurance covers you for this difference.
Do I have to have GAP insurance?
No. It is totally your choice and decision. Our trained staff are available to advise on how GAP insurance works and could be of benefit to you.
Where can I get quotes for GAP insurance?
We can provide you with a quote. You can also go on line and search for GAP insurance to get other quotes.
How much does GAP insurance cost?
The cost of GAP insurance varies depending on the amount of cover. An average policy tends to be around £199. Our specially trained staff can provide a detailed quote on request.