Car Gap Insurance

The many terms for GAP Insurance

There are some differences between these terms with regard to the type of cover provided; please call us if you are in any doubt as to which policy is right for you.

Click4Gap is a committed insurance company.

A Basic Overview

This policy offers customers protection in the event that your new or used car is "totaled" or "written-off". This insurance will pay for the gap between the amount you paid for the car, the amount due in settlement to the finance or contract hire company, and the actual cash value of the car at the time prior to the accident (your comprehensive motor insurance firm will inform you of this depreciated value). This way you are protected in the likely event of the insurance payout being a lot less than the actual amount that you still owe on the vehicle, or the amount that you paid for the car.

Illustration: you have just had an accident with your six-month old motorcar and it is declared a complete "write-off" - a total loss - by your comprehensive motor insurer. With comprehensive motor insurance you are protected and a vehicle will be replaced at no cost to you – right? Probably not, unless you have taken out car gap insurance, return to invoice insurance (or "retail price protection", as some new car dealerships are now selling it), finance gap or vehicle replacement gap, which covers you for the gap between the actual value of the car prior to the accident and the amount that you still owe on the vehicle, or the amount you originally paid, or the cost of replacing your car with a brand new one. Without this specialised type of insurance, you could end up being short by thousands of pounds.

Car gap insurance is a policy that will protect you against the depreciation of your car in the event of total loss due to an accident or even theft. This policy will not be included within your motor insurance policy but it will help to protect you against a serious financial loss should the unthinkable occur.

Comprehensive Insurance has a major shortfall.

Most finance companies require owners to have fully comprehensive motor insurance on new cars; however, gap insurance is usually not included within these types of policies. If your car is accidentally totaled or written-off, perhaps even stolen, especially within the first two years of your car purchase, the effects of new car depreciation could deliver you a very nasty surprise financially.

Why is car gap insurance so important to add to your current comprehensive motor insurance policy? To reiterate then: your standard motor insurance policy will only cover your vehicle's pre-accident depreciated value, which can end up being a whole lot less than what you initially paid for the vehicle. The moment you start driving your vehicle the value of the vehicle is depreciating. So whether you paid cash or obtained finance for your new vehicle, you could find yourself in a serious financial predicament in the event of the loss of your vehicle.

Don't End Up with a Financial Shortfall on the Retail Price you paid for your Car!

Your car gap insurance policy should be purchased according to the quality of the cover rather than the price. By using our online guide at Click4Gap, we are able to help save you money by shopping online. Not so long ago we all had to drive to the supermarket to do our monthly shopping; nowadays we have the luxury of online shopping, and in the case of GAP cover, this actually makes it cheaper than purchasing from a car dealer.

If you are involved in a car accident that leaves you with the situation of your car being totaled or declared an insurance write off, which we hope will never happen to you, you might find out that you are paying off a loan for a car that you do not even drive! This is where your car gap insurance becomes extremely important.

Vehicles drop in value enormously in their first year, and should your vehicle be written off or stolen you could well find that the amount outstanding to the finance company is more than the your comprehensive insurer is offering to pay. A finance gap insurance policy will cover the difference between what you owe on your vehicle and what the insurance company says that the vehicle is worth at the time prior to the loss of the vehicle. You may find that if you are leasing a car, the leasing company could require you to take out gap insurance as well.

Return to invoice insurance (RTI) is great cover for new and used cars for cash, finance, contract hire or leasing customers i.e. whether you paid cash outright, borrowed the money from a bank, taken a motor loan, or arranged contract car hire.

This level of cover pays the difference between the total loss pre-accident (or theft) depreciated value offered by your motor insurance company and the original amount you paid for your car - which means you are guaranteed to get back the original purchase price in full.

Vehicle replacement insurance (VRI) also offers great cover for new cars bought using cash, finance, contract hire or leasing customers.

If your car declared a total loss by your comprehensive motor insurer, vehicle replacement gap insurance (VRI) provides you with a new equivalent car regardless of price increases. It takes away the risk of the vehicle being worth less than the settlement figure, by providing a replacement on a like-for-like basis.

Gap Insurance coverage will be very important to you if your vehicle is stolen. Obviously thieves prefer to steal new cars, so they end up looking for the most popular cars and brand names. For all your car gap insurance needs contact Click4Gap and put us to the test, we guarantee you will not be disappointed.