When purchasing a new car, most buyers are focused on securing the best deal, the best model, or the best financing option. However, one often overlooked consideration is GAP (Guaranteed Asset Protection) insurance. GAP insurance is designed to protect you financially in the event your car is written off or stolen. In the UK, several providers offer different types of GAP insurance, and finding the best one for your needs can be challenging. This guide will help you navigate the options available and choose the best GAP insurance for your circumstances.
What is GAP Insurance?
GAP insurance is a policy that covers the difference between what your car insurer will pay out for a total loss and the amount you still owe on your car loan or finance agreement. When your car is written off, your insurer typically offers the market value of your vehicle, which may be much lower than what you paid for it. If you’re still paying off a car loan, this could leave you with a significant financial shortfall. GAP insurance bridges that gap and ensures you’re not left with a bill to pay.
Types of GAP Insurance
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Return to Invoice (RTI) GAP Insurance: This is one of the most common forms of GAP insurance. It covers the difference between the current market value of your car and what you originally paid for it. RTI GAP insurance is particularly beneficial for new cars that depreciate quickly.
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Vehicle Replacement GAP Insurance: This policy ensures that if your car is written off, the payout will be enough to buy a replacement car of the same make, model, and specification. This type of cover is especially useful for those who want to replace their car with something similar, rather than just covering the outstanding finance.
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Finance GAP Insurance: If you have a finance agreement on your car (such as a loan, hire purchase, or leasing arrangement), finance GAP insurance will cover the difference between the insurance payout and the remaining balance on your finance agreement. This is ideal if you’re still paying off your car and want to ensure that your finance obligations are fully met.
Why Do You Need GAP Insurance?
In the unfortunate event of an accident or theft, a comprehensive insurance policy will only pay out the market value of best gap insurance uk your car. Unfortunately, new cars lose their value quickly, with some depreciating by as much as 40% in the first year. If you have an outstanding car loan or finance agreement, the payout may not cover the full amount you owe, leaving you with a significant financial gap. GAP insurance can prevent this by covering the difference, ensuring you’re not left in a difficult financial position.
Top Providers of GAP Insurance in the UK
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Alaine GAP Insurance: Alaine is known for offering excellent customer service and a range of affordable GAP insurance options. They provide flexible cover, including Return to Invoice and Vehicle Replacement GAP, and their policies are tailored to individual needs.
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GAP Direct: One of the leading providers of GAP insurance in the UK, GAP Direct offers a variety of coverage options with competitive pricing. They also provide a clear, transparent claims process and reliable customer support.
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Car GAP Insurance: Car GAP Insurance offers straightforward and affordable policies, with the flexibility to choose the level of cover that suits your needs. They are known for their no-nonsense approach and customer-first service.
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Sky Insurance: Sky Insurance provides comprehensive GAP insurance options, particularly for both new and used cars. They offer great flexibility in terms of policy types, and their reputation for excellent customer service makes them a trusted choice.
Conclusion
When buying a car, it’s easy to overlook the importance of GAP insurance. However, considering the rapid depreciation of vehicles, especially new ones, GAP insurance is a wise investment. It protects you financially in the event your car is written off or stolen, ensuring you’re not left with an outstanding loan or financial obligation. By considering factors like the type of cover, cost, and the reputation of providers, you can find the best GAP insurance to suit your needs and enjoy peace of mind on the road.