Guaranteed Asset Protection (GAP) Insurance Quote

What is GAP Insurance?

Guaranteed Asset Protection (GAP) Insurance is a product which is designed to protect you against financial loss if your vehicle is declared a total loss by your insurer following an accident, fire or theft.

In the event that your vehicle is written off (damaged beyond economic repair) by your insurance company, there could be a ‘Gap’ between the market value at the time and the amount owed on the car. GAP insurance covers the monetary difference between the amount paid by the insurer in the event of a total loss and the amount owed on the finance settlement.

The GAP policy is designed to work alongside your motor insurance policy so if your vehicle is declared a total loss or stolen your insurer will normally pay the current market value of the vehicle at the time the loss is incurred. For newer models the market value depreciates very quickly and is almost certainly going to be less than the amount owing on any finance agreement, which leaves a shortfall to pay – the GAP policy is designed to insure the sum between the 2 figures.

You purchase a new Mercedes-Benz A200 at £30,000. Within the first 12 months the vehicle is stolen, the market value of the vehicle at the time of the theft being £20,000 – so far you have paid off £4800 of the £30,000 leaving your exposure on the finance agreement at £25,200 – once the insurers have agreed the settlement amount for the vehicle value at £20,000 you would be left with a balance outstanding on the finance agreement of £5200. In this example the GAP policy would pay the difference left to pay between the vehicle valuation on the day of the loss and the amount owed on the finance agreement, leaving the policyholder with no financial loss or liability on the finance agreement. Without the GAP insurance in place that £5200 balance would be payable to the finance company by the customer.

Car Theft – Car thefts in the UK are at an all time high, according to data released by RAC car thefts in the UK have risen by 56% in the past 4 years.

Accident – With vehicle repair costs soaring all the time, the cost of claims is ever increasing and as such increasing the likelihood of a vehicle involved in an accident being declared beyond economic repair.

Fire – according to fireservice firesafety, every year in the UK over 100,000 cars (approx. 300 a day) go up in flames, around 65% of these fires are started deliberately or as an act of vandalism.