# Gap Insurance.



## dewsweeper (Feb 22, 2017)

My neighbour,a single mum,is buying a new car,a Honda Jazz.
She has been offered gap insurance and asked my advice.
I wonder if someone could offer their views and I can let her know what the consensus is on the forum.
Thanks


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## Coffey (Feb 22, 2017)

I bought it when I got my new car from the dealership. Didn't bargain and big mistake. They can offer it much cheaper than they originally offer and also insurance companies can provide the service and in my case was a lot cheaper than what a friend got offered as their best offer in the dealership.

I bought it more for peace of mind and thankfully I haven' had to use it so can't comment on the claiming process


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## need_my_wedge (Feb 22, 2017)

Just been offered GAP as part of a new car purchase. They want Â£500+, look online and can find it Â£300 cheaper, although I'm sure there are some caveats depending on the policies. This/ last months What Car had an article on it (was reading in a waiting room yesterday) with some good info and recommended online options.


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## Deleted member 16999 (Feb 22, 2017)

http://forums.golf-monthly.co.uk/showthread.php?85320-Car-Leasing/page13&highlight=insurance

Some good info on GAP on this thread


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## ger147 (Feb 22, 2017)

Never had it, deffo not for me.


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## spongebob59 (Feb 22, 2017)

Got mine here :

https://www.ala.co.uk/

Thought they were excellent when my previous car was wriiten off.


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## Tashyboy (Feb 22, 2017)

Would not touch it with a barge pole and some of the previous comments ( Coffey, need my wedge ) has hit the nail on the head. 
when I took my lad in to Santander to sort out a load of accounts for him last week. We were talking about PPI claims. The woman who was dealing with us said " the  next big claim going through will be against car companies and Gap insurance", she also said "you can quote me on that". She reckons the banks have been talking about it for quite some time.
For me gap insurance is like, warranty, polish kits and all the other bits and bobs car dealerships offer you trying to get a bit more out of you.


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## spongebob59 (Feb 22, 2017)

Yes, you're right, it is an additional warranty againset the depreciation of your cars value against market value with time.

The policy I bought (rather than was sold) was about 1/2 price and I thought that was good value.

If you don't want it don't buy it.


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## Coffey (Feb 22, 2017)

Yeah I feel like I was sold a dummy! Was my first car and I was excited and just stuck it onto the finance total and didn't make much a difference to the monthly payments. Ah well, you live and you learn.


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## Tashyboy (Feb 22, 2017)

Coffey said:



			Yeah I feel like I was sold a dummy! Was my first car and I was excited and just stuck it onto the finance total and didn't make much a difference to the monthly payments. Ah well, you live and you learn.
		
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Your day may well come though.


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## Coffey (Feb 22, 2017)

Tashyboy said:



			Your day may well come though.
		
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That is also true, I was just stupid buying it straight off from the dealer when I could have got it much much cheaper else where


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## Liverpoolphil (Feb 22, 2017)

I buy Gap Insurance every time - mug not too 

About 20 years ago I got a car from a car supermarket on finance 

6 months later it was crashed into and it was written off - a gap of about Â£2000 between what was left on the finance and what the insurance company finally would give me for the car - gap insurance did exactly what it says , it filled that gap - without it I would have had to continue to pay the finance off so every time I get any car now it's always with gap insurance


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## gmhubble (Feb 22, 2017)

Absolutely yes - its a must buy BUT ....... buy it online - always 25% of the cost that the dealer charges

Have both our Touareg and BMW JCW on Gap Insurance - dealers wanted 400 each for the policy - I got them for roughly 125 each

For that amount the 125 could save me 10,000 over the next three years so it was a no brainer



dewsweeper said:



			My neighbour,a single mum,is buying a new car,a Honda Jazz.
She has been offered gap insurance and asked my advice.
I wonder if someone could offer their views and I can let her know what the consensus is on the forum.
Thanks
		
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## full_throttle (Feb 22, 2017)

https://www.ala.co.uk/gap-insurance?gclid=CIb2i7bNpNICFe0V0wodPVMIYQ

I got GAP insurance for my motor, worked out Â£1 a week for 4 years, to cover me for 5 years. there are a few options available, so read the small print, 

Basically, if the car is written off within the gap insurance period then; i) the difference between insurance value and replacement cost is met or ii) the difference between the insurance value and invoice cost is met


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## Alex1975 (Feb 22, 2017)

Liverpoolphil said:



			I buy Gap Insurance every time - mug not too 

About 20 years ago I got a car from a car supermarket on finance 

6 months later it was crashed into and it was written off - a gap of about Â£2000 between what was left on the finance and what the insurance company finally would give me for the car - gap insurance did exactly what it says , it filled that gap - without it I would have had to continue to pay the finance off so every time I get any car now it's always with gap insurance
		
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Out of interest how much have you spent on it to this point? More than Â£2k?


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## Smiffy (Feb 23, 2017)

Tashyboy said:



			Would not touch it with a barge pole
		
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That's very short sighted of you Tash.
Okay, if you were buying a cheap car to run into the ground, fair enough.
But if you were buying a fairly expensive new (or used) car then from my point of view you would be an idiot not to take it out.
You don't have to buy it from the dealer either, GAP insurance is available from many other places so you don't have to line the dealers pocket.
And since the PPI "scandal" anybody selling GAP insurance has to adhere to FCA (Financial Conduct Authority) guidelines, so a "miss-sell" isn't going to happen.
Any potential purchaser of GAP insurance is advised, in writing, that it is a product that is available elsewhere, and that they are free to explore this avenue. 
We are not allowed to "recommend" GAP insurance, we are not allowed to hard sell it. We are only allowed to mention it, and the customer is free to purchase from wherever they want.

*True story by the way..........*
A few years ago, I was working on a Sunday and I an elderly couple came into the showroom. It was fairly quiet, I asked them how I could help them and they informed me that they had just written their Nissan Pixo off, and could I give them an "idea" of what they were likely to get offered from their insurance company. They gave me the details of the car, mileage etc. and I carried out an online valuation. Based on what I saw I advised them what they were likely to be offered (around the Â£3,500 mark if I remember correctly). 
They had purchased the car from us (not from me personally I might add) and I then asked them if they had purchased GAP insurance.
They couldn't remember.
So I nipped upstairs to our filing system, got their deal file out, and sure enough they had purchased it, but had forgotten about it.
I told them to phone Autoprotect (the GAP insurance company we used at the time) and the upshot was that a few weeks later they were back in to see me to buy a brand new Nissan Micra, as the shortfall had been met and they now had Â£8,500.00 to spend, rather than the Â£3,500.00 we had originally anticipated. 
I am not saying that everybody should buy GAP insurance, far from it.
But on a large outlay like an expensive car, it's a bit short sighted to state "I wouldn't touch it with a barge pole".

Another thing to remember, especially if you are buying a car on a PCP finance scheme with a large "balloon" payment at the end.
If you wrote your car off, the minute it is declared a write off, *all of the finance balance outstanding becomes due.
This includes the balloon payment.
You cannot carry on making the payments to the finance company as they now have no "interest" to fall back on should you fail to keep them up.
So you could find yourself in lumbar. You've got 18 payments left PLUS the balloon payment. That is going to hurt.

*


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## Alex1975 (Feb 23, 2017)

Smiffy said:



			That's very short sighted of you Tash.
Okay, if you were buying a cheap car to run into the ground, fair enough.
But if you were buying a fairly expensive new (or used) car then from my point of view you would be an idiot not to take it out.
You don't have to buy it from the dealer either, GAP insurance is available from many other places so you don't have to line the dealers pocket.
And since the PPI "scandal" anybody selling GAP insurance has to adhere to FCA (Financial Conduct Authority) guidelines, so a "miss-sell" isn't going to happen.
Any potential purchaser of GAP insurance is advised, in writing, that it is a product that is available elsewhere, and that they are free to explore this avenue. 
We are not allowed to "recommend" GAP insurance, we are not allowed to hard sell it. We are only allowed to mention it, and the customer is free to purchase from wherever they want.

*True story by the way..........*
A few years ago, I was working on a Sunday and I an elderly couple came into the showroom. It was fairly quiet, I asked them how I could help them and they informed me that they had just written their Nissan Pixo off, and could I give them an "idea" of what they were likely to get offered from their insurance company. They gave me the details of the car, mileage etc. and I carried out an online valuation. Based on what I saw I advised them what they were likely to be offered (around the Â£3,500 mark if I remember correctly). 
They had purchased the car from us (not from me personally I might add) and I then asked them if they had purchased GAP insurance.
They couldn't remember.
So I nipped upstairs to our filing system, got their deal file out, and sure enough they had purchased it, but had forgotten about it.
I told them to phone Autoprotect (the GAP insurance company we used at the time) and the upshot was that a few weeks later they were back in to see me to buy a brand new Nissan Micra, as the shortfall had been met and they now had Â£8,500.00 to spend, rather than the Â£3,500.00 we had originally anticipated. 
I am not saying that everybody should buy GAP insurance, far from it.
But on a large outlay like an expensive car, it's a bit short sighted to state "I wouldn't touch it with a barge pole".

Another thing to remember, especially if you are buying a car on a PCP finance scheme with a large "balloon" payment at the end.
If you wrote your car off, the minute it is declared a write off, *all of the finance balance outstanding becomes due.
This includes the balloon payment.
You cannot carry on making the payments to the finance company as they now have no "interest" to fall back on should you fail to keep them up.
So you could find yourself in lumbar. You've got 18 payments left PLUS the balloon payment. That is going to hurt.

*

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But you make money from selling it ye?


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			But you make money from selling it ye?
		
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Yes.
Problem?


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## CheltenhamHacker (Feb 23, 2017)

Alex1975 said:



			But you make money from selling it ye?
		
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Did you miss the part he said it's available elsewhere?


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## Alex1975 (Feb 23, 2017)

Smiffy said:



			Yes.
*Problem*?
		
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Of course not, I am a finance broker and a member of the FLA. I will be at the FLA annual dinner next week. However, being that this is how you make money, of course your going to say how important it is.


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## Alex1975 (Feb 23, 2017)

CheltenhamHacker said:



			Did you miss the part he said it's available elsewhere?
		
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Look, its a scam, the first most people will ever hear about it is from their car dealer, they will either take it off the car dealer or not at all and they will only take it because they have been scared into it. Insurance to cover what your insurance does not... I mean come on... its hilarious!


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			Look, its a scam, the first most people will ever hear about it is from their car dealer, they will either take it off the car dealer or not at all and they will only take it because they have been scared into it.
		
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You also missed the part where I said we weren't allowed to recommend it, or "hard sell" it.
We just mention it.
If a customer wants to buy it that is entirely up to them.
I am a salesman, and I sell things, GAP insurance being one of them.
What's the option? Give it away free? 
Go buy a new car for Â£30k and write it off or have it stolen two years down the line.
When your insurance company offer you Â£15k, tell me GAP is a scam.
Until then, I'd say nowt.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			Of course not, I am a finance broker
		
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So you work for love?


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## Alex1975 (Feb 23, 2017)

Smiffy said:



			You also missed the part where I said we weren't allowed to recommend it, or "hard sell" it.
We just mention it.
If a customer wants to buy it that is entirely up to them.
I am a salesman, and I sell things, GAP insurance being one of them.
What's the option? Give it away free? 
Go buy a new car for Â£30k and write it off or have it stolen two years down the line.
When your insurance company offer you Â£15k, tell me GAP is a scam.
Until then, I'd say nowt.
		
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lol


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## Coffey (Feb 23, 2017)

Smiffy said:



			You also missed the part where I said we weren't allowed to recommend it, or "hard sell" it.
We just mention it.
If a customer wants to buy it that is entirely up to them.
I am a salesman, and I sell things, GAP insurance being one of them.
What's the option? Give it away free? 
Go buy a new car for Â£30k and write it off or have it stolen two years down the line.
When your insurance company offer you Â£15k, tell me GAP is a scam.
Until then, I'd say nowt.
		
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I have to say that I think I was hard sold it. I was told that 'They wouldn't let me walk out without it' and 'It would be a big mistake not to take it' and more things a long those lines. Now this was my first proper car I was buying and I think they knew that. 

But these are the lessons that you learn and will know for next time that it is available at other places and cheaper. I think I would still take it now as wouldn't want a big bill to pay off the remainder of the finance.


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## Smiffy (Feb 23, 2017)

Coffey said:



			I have to say that I think I was hard sold it. I was told that '*They wouldn't let me walk out without it*' and 'It would be a big mistake not to take it' and more things a long those lines.
		
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If you were categorically told that then that could be classed as a "miss sell" under FCA regulations.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			lol
		
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Why the "lol"???
You think it is a scam, I'm telling you it's not.
Nowhere if my responses have I said you have to buy it from the dealer.
You have a choice whether to go for it or not.
How about the case I mentioned above about the elderly couple?
How do you think they felt when they got Â£8,500.00 back instead of Â£3,500.00???


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## Twire (Feb 23, 2017)

If I wrote my car off, where would the insurance company get my cars valuation from. I always assumed it was market value.


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## Alex1975 (Feb 23, 2017)

Smiffy said:



			Why the "lol"???
You think it is a scam, I'm telling you it's not.
Nowhere if my responses have I said you have to buy it from the dealer.
You have a choice whether to go for it or not.
How about the case I mentioned above about the elderly couple?
How do you think they felt when they got Â£8,500.00 back instead of Â£3,500.00???
		
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I sell finance, I don't sell cars as an add on, I just sell my core product. Why would you even offer it, your car people! 

If you are so passive in your selling of it, why so defensive now? 

Cars lose value over time, especially from new via a dealer. I think your strong defence of this scam is a bad look for you.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			I sell finance, I don't sell cars as an add on, I just sell my core product. Why would you even offer it, your car people! 

If you are so passive in your selling of it, why so defensive now? 

Cars lose value over time, especially from new via a dealer. I think your strong defence of this scam is a bad look for you.
		
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Being in finance, you must be quite intelligent.
Why are you talking such a load of bollocks????


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## Val (Feb 23, 2017)

Alex1975 said:



			I sell finance, I don't sell cars as an add on, I just sell my core product. Why would you even offer it, your car people! 

If you are so passive in your selling of it, why so defensive now? 

Cars lose value over time, especially from new via a dealer. I think your strong defence of this scam is a bad look for you.
		
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Can you explain why you think it's a scam?

I'll add that finance left on cars doesn't come down with your payments as quickly as a car depreciates therefore unless you have hard cash to pay any potential shortfall in the even of a car write off then GAP is a good idea and not a scam.


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## Smiffy (Feb 23, 2017)

Twire said:



			If I wrote my car off, where would the insurance company get my cars valuation from. I always assumed it was market value.
		
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They have access to online price guides and auction prices etc.
They "usually" go somewhere between trade and retail on their valuations.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			Cars lose value over time, especially from new via a dealer.
		
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Exactly!
So your Â£25k BMW will be worth Â£10k in 3 years time.
If you could cover that Â£15k loss for the equivalent of Â£100.00 per annum would you not consider it?
It doesn't take much financial sense to work out that is not a scam.
Now if the GAP company didn't pay out, yes that's a scam.


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## Liverpoolphil (Feb 23, 2017)

Alex1975 said:



			Look, its a scam, the first most people will ever hear about it is from their car dealer, they will either take it off the car dealer or not at all and they will only take it because they have been scared into it. Insurance to cover what your insurance does not... I mean come on... its hilarious!
		
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Sorry cant see how it's a scam when it helped me cover the gap between the money the insurance were going to pay out and how much I still owed on the finance. Every time I have asked for it as opposed to it being a hard sell


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## Twire (Feb 23, 2017)

Smiffy said:



			They have access to online price guides and auction prices etc.
They "usually" go somewhere between trade and retail on their valuations.
		
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OK that's what I thought.

So unless the GAP insurance pays out new for old, or I have my car on finance the decision to have GAP would be marginal for me.

I was asked if I would like it when I bought my last car, along with wheel and tyre insurance, and lifeshine, but decided against it as it was the best part of a grand extra.


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## Alex1975 (Feb 23, 2017)

Fully comprehensive car insurance from a quality provider will replace your car in the first two years for a new car of the same spec, after that they will provide cover for an equivalent vehicle.


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## Liverpoolphil (Feb 23, 2017)

Alex1975 said:



			Fully comprehensive car insurance from a quality provider will replace your car in the first two years for a new car of the same spec, after that they will provide cover for an equivalent vehicle.
		
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They didn't replace mine - gave me the evaluation they were willing to give for the car and then the gap insurance made up the difference to cover the finance. That was Admiral. So for an extra Â£100 a year it saved me having to pay off Â£2000 of finance


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## Deleted member 18588 (Feb 23, 2017)

Alex1975 said:



			after that they will provide cover for an equivalent vehicle.
		
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The value of which is likely to be significantly less than the outstanding finance. Hence *Gap *&#8203;insurance. Also I think you may find that "like for like" replacement will only be in the first six to twelve months.


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## Alex1975 (Feb 23, 2017)

MetalMickie said:



			The value of which is likely to be significantly less than the outstanding finance. Hence *Gap *&#8203;insurance. Also I think you may find that "like for like" replacement will only be in the first six to twelve months.
		
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Yes you will still have outstanding finance but you would have if the vehicle was not written off or stolen so nothing has changed. You have a car worth the same second hand price and x payments left to pay.


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## Liverpoolphil (Feb 23, 2017)

Alex1975 said:



			Yes you will still have outstanding finance but you would have if the vehicle was not written off or stolen so nothing has changed. You have a car worth the same second hand price and x payments left to pay.
		
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So what happens when the insurance company don't replace like for like or pay out the full amount to cover the finance ?


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## Alex1975 (Feb 23, 2017)

Liverpoolphil said:



			So what happens when the insurance company don't replace like for like or pay out the full amount to cover the finance ?
		
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Why would they not cover like for like? Read your insurance documents when applying for car insurance.


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## Deleted member 18588 (Feb 23, 2017)

Alex1975 said:



			Yes you will still have outstanding finance but you would have if the vehicle was not written off or stolen so nothing has changed. You have a car worth the same second hand price and x payments left to pay.
		
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But if the car is written off at a value of, say, Â£12,000 but the outstanding PCP value is, say, Â£15,000 who funds the shortfall of Â£3,000. (The preceding figures are approx but are based on a real case).

After 12 months "like for like" is most unlikely.


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## Liverpoolphil (Feb 23, 2017)

Alex1975 said:



			Why would they not cover like for like? Read your insurance documents when applying for car insurance.
		
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They didn't for me - they gave me their valuation of the car and then I was left with a big gap with the finance left 

So the question is still valid - what happens when the valuation still leaves you with finance to pay off.


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## Alex1975 (Feb 23, 2017)

Liverpoolphil said:



			They didn't for me - they gave me their valuation of the car and then I was left with a big gap with the finance left 

So the question is still valid - what happens when the valuation still leaves you with finance to pay off.
		
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They gave you enough money to buy a new car that would be the same value as if you had sold your written off/stolen car that same day (the day of the theft or accident?)


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## Liverpoolphil (Feb 23, 2017)

Alex1975 said:



			They gave you enough money to buy a new car that would be the same value as if you had sold your written off/stolen car that same day (the day of the theft or accident?)
		
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Sorry but no they didn't give me enough money to purchase the exact same car in the exact same condition because the money they gave was closer to the trade valuation. I don't think I have ever heard an insurance fully pay out or even replace like for like ( especially on any car over 6 months old ) 

Look you don't like Gap Insurance - fine but it has been good for me for a small cost and it's worked , it's not a scam , I wasnt pressured into anything and it helped me when my car was written off. I know that if something happened to my car and it was written off then the gap Insurance would enable me to ensure I wasn't left with any finance after an insurance pay out.

It seems reading all the money expert websites gap Insurance is recommended dependant on what car you buy - so not a scam


https://www.moneyadviceservice.org.uk/en/articles/do-you-need-gap-insurance


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			They gave you enough money to buy a new car that would be the same value as if you had sold your written off/stolen car that same day (the day of the theft or accident?)
		
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I don't know what your understanding of motor insurance is, but there is not one insurance company going that would replace a brand new Â£25k car with another brand new Â£25k car two years into a policy. Some insurance companies replace a brand new car within the first 12 months, but NONE would do it after two.
So just to reiterate and to point it out in simple "car sales speak"......
You buy a brand new Â£25k BMW and 33 months later you write it off.
Your insurance company will offer you around Â£12k if you are lucky, more likely Â£10k.
You are now the proud owner of a cheque for Â£10k but don't have a car.
So to replace your nice shiny motor you have now got to stump up Â£15k on top of your insurance companies cheque.
If you had taken out GAP insurance, you would have two cheques. One for Â£10k from your insurance company and the other for Â£15k from the GAP payout.
Going into a BMW dealer and ordering a new car is going to cost you chuff all.
I hope that makes sense?


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## Alex1975 (Feb 23, 2017)

Smiffy said:



			I don't know what your understanding of motor insurance is, but there is not one insurance company going that would replace a brand new Â£25k car with another brand new Â£25k car two years into a policy. Some insurance companies replace a brand new car within the first 12 months, but NONE would do it after two.
So just to reiterate and to point it out in simple "car sales speak"......
You buy a brand new Â£25k BMW and 33 months later you write it off.
Your insurance company will offer you around Â£12k if you are lucky, more likely Â£10k.
You are now the proud owner of a cheque for Â£10k but don't have a car.
So to replace your nice shiny motor you have now got to stump up Â£15k on top of your insurance companies cheque.
If you had taken out GAP insurance, you would have two cheques. One for Â£10k from your insurance company and the other for Â£15k from the GAP payout.
Going into a BMW dealer and ordering a new car is going to cost you chuff all.
I hope that makes sense?
		
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100%, you buy a  Â£10k car and finish making your payments as you would have if nothing had happened. I think the reason we are not seeing one another's point is that yall have a different value system as far as depreciation. You want your cake and eat it and your happy to pay for that. I am not a gambling man so not happy to do so.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			100%, you buy a  Â£10k car and finish making your payments as you would have if nothing had happened.
		
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You can't !!!
If you had the car on finance and it was written off, you have to pay the finance balance outstanding immediately. You cannot carry on paying for it.
So if you actually owed Â£12k you would have to stump up another Â£2k of your own money.
Is it so difficult to understand?


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## Alex1975 (Feb 23, 2017)

Perhaps on the finance product you provide... calm yourself down, its a scam and your defence of it is worrying. Your industry needs to sort its self out.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			Perhaps on the finance product you provide... calm yourself down, its a scam and your defence of it is worrying. Your industry needs to sort its self out.
		
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So you are telling me I'm getting hire purchase regulations wrong now are you?


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## Liverpoolphil (Feb 23, 2017)

Alex1975 said:



			100%, you buy a  Â£10k car and finish making your payments as you would have if nothing had happened. I think the reason we are not seeing one another's point is that yall have a different value system as far as depreciation. You want your cake and eat it and your happy to pay for that. I am not a gambling man so not happy to do so.
		
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If your car is written off and you have outstanding finance the insurance pay out im pretty sure goes to the finance company not the person so you are left with no car , no money and outstanding finance still to pay


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## Alex1975 (Feb 23, 2017)

Lots of people offer finance products that are many and varied, if you need something called gap insurance I would suggest you picked the wrong product for your asset.... Feel free to just take what the car garage offers you but there are people who`s actual job it is to sell financial products. They don't sell cars on the side either... we call them banks, funders or finance professionals. And on this topic I am done as some of you seem to be indoctrinated into taking what the first person offers and then taking insurance to cover the short falls in said product...


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## Smiffy (Feb 23, 2017)

Liverpoolphil said:



			If your car is written off and you have outstanding finance the insurance pay out im pretty sure goes to the finance company not the person so you are left with no car , no money and outstanding finance still to pay
		
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He is a financial whizzkid Phil.
There's nothing you can tell him.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			Lots of people offer finance products that are many and varied, if you need something called gap insurance I would suggest you picked the wrong product for your asset.... Feel free to just take what the car garage offers you but there are people who`s actual job it is to sell financial products. They don't sell cars on the side either... we call them banks, funders or finance professionals. And on this topic I am done as some of you seem to be indoctrinated into taking what the first person offers and then taking insurance to cover the short falls in said product...
		
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Let us know when you make your first million bonehead.


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## Alex1975 (Feb 23, 2017)

Smiffy said:



			He is a financial whizzkid Phil.
There's nothing you can tell him.
		
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You have shamed yourself and furthered a stereotype.... You don't need to be a wizard, you just don't need to be an idiot.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			You have shamed yourself
		
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I know. I doubt whether I will sleep very well tonight, and dread walking through the town over the week-end.
My children already disown me and I expect I will be drummed out of the golf club.
And I think if anyone has shown themselves up to be an idiot it's you mate.
A new car for old after two years with a car insurance company.... hahahahaha!!


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## Oxfordcomma (Feb 23, 2017)

Don't know about anyone else but I'm now fully expecting Smiffy to turn up to the next meet with a shirt like this


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## Blue in Munich (Feb 23, 2017)

Oxfordcomma said:



			Don't know about anyone else but I'm now fully expecting Smiffy to turn up to the next meet with a shirt like this 
View attachment 22023

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Nah, Gapgate just hasn't got the same ring to itâ€¦â€¦â€¦â€¦â€¦.


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## Smiffy (Feb 23, 2017)

Oxfordcomma said:



			Don't know about anyone else but I'm now fully expecting Smiffy to turn up to the next meet with a shirt like this 
View attachment 22023

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I'll buy a couple of dozen of those out of my next GAP insurance commission.


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## KenL (Feb 23, 2017)

Smiffy said:



			Why the "lol"???
You think it is a scam, I'm telling you it's not.
Nowhere if my responses have I said you have to buy it from the dealer.
You have a choice whether to go for it or not.
How about the case I mentioned above about the elderly couple?
How do you think they felt when they got Â£8,500.00 back instead of Â£3,500.00???
		
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For me it is a scam for a car dealer charge Â£300 plus for it when it is readily available aftermarket for far less.


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## Deleted member 18588 (Feb 23, 2017)

Alex1975 said:



			You have shamed yourself and furthered a stereotype.... You don't need to be a wizard, you just don't need to be an idiot.
		
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I think you may have managed that yourself when you referred to banks in the same breath as professionals. 

They are merely corporate bodies that  through their High Street operations attempt to utilise their size and market presence to sell products to often unsuspecting customers. Those products are often unsuited to their customers' needs, carry high charges, some of which are hidden, and are being sold by sales forces that are often target and income driven rather than acting in their customers' best interests.

How you can be critical of car-dealers and Gap insurance when banks are still clearing up the PPI scandal, LIBOR fixing and unsuitable interest hedging products for corporate customers is beyond me.


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## Val (Feb 23, 2017)

Alex1975 said:



			Yes you will still have outstanding finance but you would have if the vehicle was not written off or stolen so nothing has changed. You have a car worth the same second hand price and x payments left to pay.
		
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Makes sense to a degree I suppose but would the finance be happy to repossess thiis replacement car in event of default?


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## upsidedown (Feb 23, 2017)

Alex1975 said:



			Perhaps on the finance product you provide... calm yourself down, its a scam and your defence of it is worrying. Your industry needs to sort its self out.
		
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I trust the views offered here

http://www.which.co.uk/money/insurance/car-insurance/guides/gap-insurance/should-i-buy-gap-insurance


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## Alex1975 (Feb 23, 2017)

There is a reason that the FLA(a body made to protect consumers) forbids car salesmen from pushing this product. What might that be?


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## Smiffy (Feb 23, 2017)

KenL said:



			For me it is a scam for a car dealer charge Â£300 plus for it when it is readily available aftermarket for far less.
		
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You have the option of purchasing elsewhere though!
I pointed out in my very first post that we are only allowed to "mention" the GAP product we sell.
We make it quite clear that GAP insurance can be purchased elsewhere, and are in fact locked by a 4 day moratorium to prevent us trying to sell it before a customer has had a chance to look around.
I don't like the fact that the Â£1,300.00 telly I recently purchased in Currys most probably only cost them Â£700 or so.
It's called mark up or profit. And like everything you have a choice where you buy from.


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## Smiffy (Feb 23, 2017)

Alex1975 said:



			There is a reason that the FLA(a body made to protect consumers) forbids car salesmen from pushing this product. What might that be?
		
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To protect against mis-selling. Something started by the banks and PPI.
By the way, I've never heard of the FLA. FCA yes, but FLA?????
Who the hell are they?
And FCA regulations give the 4 day moratorium so that customers
a) Have a cooling off period
b) Can make an informed decision whether to buy the product or not
c) Can shop around for a like for like product.


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## KenL (Feb 23, 2017)

Smiffy said:



			You have the option of purchasing elsewhere though!
I pointed out in my very first post that we are only allowed to "mention" the GAP product we sell.
We make it quite clear that GAP insurance can be purchased elsewhere, and are in fact locked by a 4 day moratorium to prevent us trying to sell it before a customer has had a chance to look around.
I don't like the fact that the Â£1,300.00 telly I recently purchased in Currys most probably only cost them Â£700 or so.
It's called mark up or profit. And like everything you have a choice where you buy from.
		
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To the unsuspecting customer who trusts their salesperson they may not realise you can buy GAP elsewhere.

Not once having been offered this at a rip off price has the salesalesperson mentioned that it is available elsewhere.

No doubt there is the greed that comes with commission, so why would they?


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## SatchFan (Feb 23, 2017)

Bought my new car last year and my wife picks up her new one next week. Two different dealers, both offered gap insurance and both pointed out it was available elsewhere.


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## Smiffy (Feb 23, 2017)

KenL said:



			To the unsuspecting customer who trusts their salesperson they may not realise you can buy GAP elsewhere.

Not once having been offered this at a rip off price has the salesalesperson mentioned that it is available elsewhere.

No doubt there is the greed that comes with commission, so why would they?
		
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They HAVE to nowadays. When a salesman sells you a car, he HAS to give you an initial disclosure document. This tells you who the company are and what they are authorized to sell as far as insurance products are concerned. This document quite clearly states that the products they sell are available elsewhere. If he doesn't give you this document he is failing in his duties under the treating customers fairly guidelines.


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## Bunkermagnet (Feb 23, 2017)

I fail to see how an "insurance" can be viewed as a "scam" when it does what it says it will if called upon.
Perhaps the commision earnt on such products isn't enough for a finance salesman


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## KenL (Feb 23, 2017)

Smiffy said:



			They HAVE to nowadays. When a salesman sells you a car, he HAS to give you an initial disclosure document. This tells you who the company are and what they are authorized to sell as far as insurance products are concerned. This document quite clearly states that the products they sell are available elsewhere. If he doesn't give you this document he is failing in his duties under the treating customers fairly guidelines.
		
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So, are car salespeople selling zero GAP policies these days?


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## richart (Feb 23, 2017)

If a car salesman didn't mention gap insurance, and you subsequently had a shortfall, who would the first person be that you complained to ? To me a salesman mentioning it, advising that they can arrange it, or that you can get it elsewhere, looks to be giving you a good service.

If it was a scam, I would have expected the ambulance chasing companies to be already offering to get your money back.


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## srixon 1 (Feb 23, 2017)

If cars were not overpriced in the first place then there would not be a requirement for GAP insurance. :sbox:


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## Smiffy (Feb 23, 2017)

Oh dear. I'm out of here


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## Leftie (Feb 23, 2017)

Smiffy said:



			By the way, I've never heard of the FLA. FCA yes, but FLA?????
Who the hell are they?
		
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The Finance & Leasing Association.

You know, the people who provide finance for car purchase/leasing, televisions from Currys,  amongst other things.  

"In 2016, our members provided Â£118 billion of new finance. Â£88 billion of this was in the form of consumer credit to support purchases ranging from cars to household goods and Â£30 billion was provided to businesses and the public sector, representing almost a third of UK investment in machinery, equipment and purchased software in the UK last year."

Mind you, I'm sure that they are *very* altruistic and don't make any profit from their activities


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## Piece (Feb 24, 2017)

Jeez, just caught up on this thread! Quite frightening reading opinions and viewpoints.

People use the term 'scam' wantonly. GAP insurance is not a scam. Let's get that straight. It stems from some having a problem that GAP insurance is somehow *secretly* bundled in by the dealer at a large markup. Probably that was the practice many moons ago, but not now. Yes, it is marked up and yes they get good commission from it. If the buyer is told the full story and client still wants it, then a great sell by the dealer. 

As Smiffy has stated, regulations have changed when offering GAP at the dealers. You have the option to source your own, and yes, at a much cheaper rate. The buyer makes their own decision based on the facts given to them. The dealer can't advise on whether your insurance negates GAP - that is down to the buyer to know.

Having previously had a car written off years ago and now the owner of two new cars on finance, I declined the dealer offer of GAP on their finance scheme. I've sourced my own at a good price. Having the right GAP insurance to match the financial T&Cs of the hire purchase agreement is absolutely vital. Read the T&Cs of your agreement and the policy wording on the GAP insurance to see if it fits your need. There are several types of GAP vehicles around, the main three being: finance gap, return to invoice gap and vehicle replacement gap. I have gone for the R2I (Return to Invoice) GAP insurance, that covers me for my financial commitment and will leave me money to get a new car, should the worst happen with the car. For something like Â£1 a week for 4 years, it's really a no-brainer.

I saw one comment in this thread saying if the example car is written off you get a 10k cheque and you can still pay off the finance monthly repayments as if nothing had happened! . In the PCPs I've seen and certainly the ones I have now, once that car is written off, you are LIABLE FOR THE WHOLE FINANCIAL AMOUNT IMMEDIATELY. You can't keep paying it off regularly as the finance company have no interest because the asset has gone - they just want their money. 

GAP is not for all as buying schemes are different. However, you are brave man or woman to take out a chunky finance package, not get GAP and/or rely on your insurance to bail you out.


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## Val (Feb 24, 2017)

Good post but as we see on this thread, experience and knowledge count for nothing unless you work in finance


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## Smiffy (Feb 24, 2017)

And are pig ignorant


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## Big_G (Mar 1, 2017)

Went to look at buying a new car on a PCP last night, salesman comes back with the finance quote

Salesman: "Oh btw I've added the Gap Insurance for you, because you'll need that in case of a shortfall" Â£399

From what I read elsewhere, and after reading Smiffys posts I believe this is not allowed?

It's a pity we don't have a few more like Smiffy in the industry, as he seems to put his point across well.


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## Blue in Munich (Mar 1, 2017)

Big_G said:



			Went to look at buying a new car on a PCP last night, salesman comes back with the finance quote

Salesman: "Oh btw I've added the Gap Insurance for you, because you'll need that in case of a shortfall" Â£399

From what I read elsewhere, and after reading Smiffys posts I believe this is not allowed?

It's a pity we don't have a few more like Smiffy in the industry, as he seems to put his point across well.
		
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They tried that when I bought the motorbike and it was politely declined, they asked me to sign something to the effect that I'd been offered it, understood it & declined it, which I did, and then bought it elsewhere for considerably less.  My suggestion would be to do the same.

And you're right, Smiffy's a good 'un.


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## need_my_wedge (Mar 1, 2017)

Picking up a new car Friday, also turned down the GAP insurance offered. They wanted circa Â£450, but can get it for less than Â£200 elsewhere. The garage finance guy did warn me to check the terms and also to check any reviews on the companies in general as some are known to be slow in paying, or try to delay payment fro some time. He could be trying to scare monger, but equally good advice to make the extra checks up front.


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## Smiffy (Mar 1, 2017)

Big_G said:



			Went to look at buying a new car on a PCP last night, salesman comes back with the finance quote
Salesman: "Oh btw I've added the Gap Insurance for you, because you'll need that in case of a shortfall" Â£399
From what I read elsewhere, and after reading Smiffys posts I believe this is not allowed?
		
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He can "assumptively" build it in to the quote, but he *MUST* inform you that he has done so.
If you decide you don't want it, he is not allowed to put any barriers up.
It is your choice whether you want it, and *YOURS* only.
If he doesn't tell you he has included it, and you go on to purchase, he has mis-sold.
He would be hammered under the new FCA rulings of "treating customers fairly".


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## Smiffy (Mar 1, 2017)

need_my_wedge said:



			Picking up a new car Friday, also turned down the GAP insurance offered. They wanted circa Â£450, but can get it for less than Â£200 elsewhere. *The garage finance guy did warn me to check the terms and also to check any reviews on the companies in general as some are known to be slow in paying, or try to delay payment fro some time.* He could be trying to scare monger, but equally good advice to make the extra checks up front.
		
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He is not scare mongering per se, but like most things in life you get what you pay for.
We use a company called "Autoprotect" who have been around for donkeys and are bullet proof.
Some of the guys selling GAP/RTI policies are one man bands and might not be there for you should you run into difficulties if and when you claim.


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## need_my_wedge (Mar 1, 2017)

Smiffy said:



			He is not scare mongering per se, but like most things in life you get what you pay for.
We use a company called "Autoprotect" who have been around for donkeys and are bullet proof.
Some of the guys selling GAP/RTI policies are one man bands and might not be there for you should you run into difficulties if and when you claim.
		
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I wasn't saying he was scare mongering, just could be - seeing it from a point of view that he was trying to get me to pay more than double for his product , but equally, it was good advice. He also said pretty much what you've just added, so I appreciate it could be a bit of a gamble if you get the wrong company/ policy.


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## KenL (Mar 1, 2017)

Shouldn't be allowed to "assumptively" build it in to a quote.

Not everyone is financially astute enough to know about these things and just want a car.


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## Smiffy (Mar 2, 2017)

KenL said:



			Shouldn't be allowed to "assumptively" build it in to a quote.

Not everyone is financially astute enough to know about these things and just want a car.
		
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He is perfectly allowed to assumptively build it in.
He's just not allowed to not tell you.
Don't worry, you don't have to be financially astute.
He's astute enough for you both.


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## Smiffy (Mar 2, 2017)

KenL said:



			Not everyone is financially astute enough to know about these things and just want a car.
		
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And that is why you are "advised".
How many times have I mentioned the three magic words on this thread "treating customers fairly?"
That is why you will sign a declaration at the end of the sale to confirm that
A) You were offered GAP/RTI
B) You decided to either purchase or decline said offer.
Nobody, repeat *nobody* is forcing you to take it out, they are just *advising*.

Imagine the scene.... two and a half years time, you're down the pub with your mate bemoaning the fact that you have just written your car off.
Cost you Â£30k it did, two and a half years ago, and your bloody insurance company have just offered you Â£12k. Life's not fair is it Ken. What can you do with Â£12k????
Then your mate says "Did the salesman who sold you the car offer you GAP insurance Ken? If you had taken that out you would now have your Â£30k back".
With that little bit of paper signed to say that you were offered it but declined it, you can't complain.
Without that little bit of paper, you, like thousands of others, could jump on the GAP equivalent of the PPI gravy train and take the dealership for all it's worth.
Times have changed. For the better.
Like I say, you don't have to be financially astute. We, believe it or not, are trying to protect you financially. Don't moan at us for doing our job.


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## KenL (Mar 2, 2017)

After 2 and a half years a Â£30k car will be lucky to be worth Â£12k so what's the major problem?


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## Smiffy (Mar 2, 2017)

KenL said:



			After 2 and a half years a Â£30k car will be lucky to be worth Â£12k so what's the major problem?
		
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So if you'd taken out GAP insurance your benefit would have been even greater!
Insurance company give you Â£10k then. GAP insurance pays out the other Â£20k.
Whichever way you do the math, you're going to get your Â£30k back.


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## KenL (Mar 2, 2017)

Cash?  Even though I may only owe Â£10k on the car?


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## Smiffy (Mar 2, 2017)

KenL said:



			Cash?  Even though I may only owe Â£10k on the car?
		
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You will receive one cheque from the insurance company for Â£10k and another cheque from the GAP insurance for the "shortfall" on what you paid for the car, in this instance Â£20k. So you have all of your Â£30k back.
Plus up to Â£250.00 of any excess you have had to pay.
So you can pay your finance balance off (Â£10k) and have Â£20k deposit left to put down on a new car, or even buy one outright.
Not such a bad deal after all is it?


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## ger147 (Mar 2, 2017)

Smiffy said:



			You will receive one cheque from the insurance company for Â£10k and another cheque from the GAP insurance for the "shortfall" on what you paid for the car, in this instance Â£20k. So you have all of your Â£30k back.
Plus up to Â£250.00 of any excess you have had to pay.
So you can pay your finance balance off (Â£10k) and have Â£20k deposit left to put down on a new car, or even buy one outright.
Not such a bad deal after all is it?
		
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I know there was some mud slinging earlier in the thread so I don't want you to mistake my question for any of that, it's a genuine questuon from a regular cary buying Joe Public.

If that is what it pays out, why is it still called Gap Insurance? In my normal every day Joe Public mind, when talking about "gap insurance", what that means to me is the difference between what I owe any finance company vs what I get from the insurance company. So if I owe Â£12k and the insurance gives me Â£10k, I would expect to get the Â£2k balance from any gap insurance I had.

What you have described is more than that, effectively a full purchase price cover while you are paying off any finance which is more than just gap insurance.

Do you offer gap insurance to punters who pay in full in cash at the time of purchase?


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## Smiffy (Mar 2, 2017)

ger147 said:



			I know there was some mud slinging earlier in the thread so I don't want you to mistake my question for any of that, it's a genuine questuon from a regular cary buying Joe Public.

If that is what it pays out, why is it still called Gap Insurance? In my normal every day Joe Public mind, when talking about "gap insurance", what that means to me is the difference between what I owe any finance company vs what I get from the insurance company. So if I owe Â£12k and the insurance gives me Â£10k, I would expect to get the Â£2k balance from any gap insurance I had.

What you have described is more than that, effectively a full purchase price cover while you are paying off any finance which is more than just gap insurance.

Do you offer gap insurance to punters who pay in full in cash at the time of purchase?
		
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Up until a few years ago, there were two types of cover available.
GAP (which was specifically targeted at Finance customers and did what you suggest above)
and
RTI (Return To Invoice) which was targeted at cash customers and paid them out the full invoice price that they paid for the car from new.
Now the products being sold are combined GAP/RTI products, that will pay out what is more beneficial to the customer.
If they are on finance and the settlement figure is higher than the cash price they paid for the car it will pay out under that.
If the RTI benefit would be more beneficial to them (as it would be if they owed less on finance than they paid for the car) then it would pay out under that.
Hope that makes sense???


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## ger147 (Mar 2, 2017)

Smiffy said:



			Up until a few years ago, there were two types of cover available.
GAP (which was specifically targeted at Finance customers and did what you suggest above)
and
RTI (Return To Invoice) which was targeted at cash customers and paid them out the full invoice price that they paid for the car from new.
Now the products being sold are combined GAP/RTI products, that will pay out what is more beneficial to the customer.
If they are on finance and the settlement figure is higher than the cash price they paid for the car it will pay out under that.
If the RTI benefit would be more beneficial to them (as it would be if they owed less on finance than they paid for the car) then it would pay out under that.
Hope that makes sense???
		
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Cool, thanks for that. The only time I ever had gap insurance was 15+ years ago and it was explained to me as the gao between what I owed vs an insurance pay out, hence the question.

A bit late to get it now for my near 5 year old Audi that I paid cash for but one good thing has come to light for me personally, namely that my wife has a new car on PCP and I didn't know I would be liable for the balloon payment as well if it gets written off, so I'm off to get some gap insurance to cover that.

So many thanks for the info, much appreciated.


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## KenL (Mar 2, 2017)

Does anyone know what percentage of cars are written off within their first 3 years?
If it is 10% then GAP looks a good deal.  If only 1 or 2% I would probably continue to take my chance and be without it.

My Audi A3 is 6 months old.  Could I still buy GAP for it?


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## Smiffy (Mar 2, 2017)

KenL said:



			Does anyone know what percentage of cars are written off within their first 3 years?
If it is 10% then GAP looks a good deal.  If only 1 or 2% I would probably continue to take my chance and be without it.

My Audi A3 is 6 months old.  Could I still buy GAP for it?
		
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We have a 90 day cut off from purchase of the car to purchase of GAP/RTI. But other companies online offer GAP/RTI so it's worth having a google and making a couple of phone calls.
You would be surprised how many cars are written off a year, but you can't really talk about percentages in a thing like this.
You never know when an accident will happen. It's the "what ifs" you are protecting yourself from.


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## need_my_wedge (Mar 2, 2017)

From looking around, some GAP RTI can be purchased within 180 days of buying the car (assuming you haven't written it off).

On Smiffy's point above re: the gap paying 20K on a 30K car if the insurance company only pay 10K. On the couple of quotes I looked at yesterday, the ask the value of the car, and then do a recommended value to insure for, i.e. car worth Â£26K, the recommended value was Â£17.5K in the two quotes I requested. In 4 years time, if the car is written off, and the insurance company only pay Â£6K for example, I'm assuming the gap will only pay 17.5K?


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## Smiffy (Mar 2, 2017)

need_my_wedge said:



			From looking around, some GAP RTI can be purchased within 180 days of buying the car (assuming you haven't written it off).

On Smiffy's point above re: the gap paying 20K on a 30K car if the insurance company only pay 10K. On the couple of quotes I looked at yesterday, the ask the value of the car, and then do a recommended value to insure for, i.e. car worth Â£26K, the recommended value was Â£17.5K in the two quotes I requested. In 4 years time, if the car is written off, and the insurance company only pay Â£6K for example, I'm assuming the gap will only pay 17.5K?
		
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That's correct. This is why you have to be careful where you buy from and make sure you are being quoted "like for like"


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## KenL (Mar 13, 2017)

Just had a wee look into this.
Quote from ALA for Â£15000 return to invoice was Â£135.
System originally suggested Â£12500 and that was Â£134.
You can purchase up until car is 1 year old.
Seems like a good deal?


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## IanM (Mar 13, 2017)

I was in the Land Rover main dealer on Saturday and looked at an ex demo Disco Sport.   I asked them to email me a quote for PCP as I was in a hurry.

The car was top of book price, they offered me less than WBAC.COM for my Freelander (bought from them and serviced by them) and included Gap in the quote at Â£499.   

Not sure they are trying very hard to sell me the car, are they?


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