Gap Insurance.

[dewsweeper]

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

 

[Coffey]

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

 

[need_my_wedge]

Just been offered GAP as part of a new car purchase. They want £500+, look online and can find it £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.

 

[Deleted member 16999]

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

Some good info on GAP on this thread

 

[ger147]

Never had it, deffo not for me.

 

[spongebob59]

Got mine here :

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

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

 

[Tashyboy]

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.

 

[spongebob59]

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.

 

[Coffey]

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.

 

[Tashyboy]

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.

Your day may well come though.

 

[Coffey]

Your day may well come though.

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

 

[Deleted member 15344]

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 £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

 

[gmhubble]

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

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

 

[full_throttle]

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

I got GAP insurance for my motor, worked out £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

 

[Alex1975]

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 £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

Out of interest how much have you spent on it to this point? More than £2k?

 

[Smiffy]

Would not touch it with a barge pole

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 £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 £8,500.00 to spend, rather than the £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.

 

[Alex1975]

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 £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 £8,500.00 to spend, rather than the £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.

But you make money from selling it ye?

 

[Smiffy]

But you make money from selling it ye?

Yes.
Problem?

 

[CheltenhamHacker]

But you make money from selling it ye?

Did you miss the part he said it's available elsewhere?

 

[Alex1975]

Yes.
Problem?

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.