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GAP insurance for Car


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Old 12-12-2010, 17:31
zippydoodah
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Hi guys and the ladies too!

I'm just looking for some advice, me and the missus are buying two "new" cars next week totalling to the price of 15000
All is going well until they mentioned about GAP insurance. Basically for those who don't know, should you write your car off, your existing insurance company would pay out for the market value (or less) but GAP would pay the remaining difference on how much you paid for the car at the time of purchase (within 3 years of taking the policy out)

Part of me thinks its a waste of time but part of me thinks it could help as because of the price of the car(s) we would have to get an older car. Plus it didn't help when the salesman put the pitch that his wife had to be cut out of her car due to an accident and she grateful she had the policy (not sure what to believe there!)

Has anyone had this type of policy before as I gather there are similar companies out there that does this. Is it a waste of time or a peace of mind? Just want to get out of the sales pitch as its probably commision led and get myself round whether to get it or not.
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Old 12-12-2010, 17:38
fat controller
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I recently bought a car at 8200, and took on a bank loan to allow me to do it, and for that reason I took out a GAP policy. The one that I have is a 'return to invoice' policy, so if the worst should happen, my car insurance pays market value, then the GAP policy then makes up the shortfall between that and the loan, and anything left between that and the invoice price, I get as a payment toward a new car.

If I was buying cash, I probably wouldn't have bothered, but the thought of being left with a couple of grand to find just to pay the debt off on my loan, to then have to sort a replacement car immediately after, if something happened, filled me with dread.
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Old 12-12-2010, 17:38
Keefy-boy
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As with all optional insurances you have to weigh the cost against the likelihood of the event.

Unless you write the car off it doesn't come into play. How many cars have you written off? How much does it cost?

Personally I distrust all insurances that are pushed alongside goods I'm buying on the basis that if I really want/need it, it would probably be better to shop around.
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Old 12-12-2010, 17:38
Helbore
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Like any insurance, its a waste of money until you need it. It could be worth checking with your standard insurance company and seeing what their policy is. I once took out GAP insurance on a new car, only to find out that my standard insurance guaranteed exactly the same thing as part of their fully comp package.

Really, it all comes down to the cost. I paid 300 for GAP insurance on a 47,000 car. I never needed it, but I think that was worth it, considering the price.
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Old 12-12-2010, 18:33
davidmcn
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the salesman put the pitch that his wife had to be cut out of her car due to an accident and she grateful she had the policy (not sure what to believe there!)
If that happened to me, the last thing I would be concerned about is how swish my next car was!

I take the view that insurance is only worthwhile for the sort of thing you wouldn't be able to afford to pay for yourself. To me this sound like the sort of scenario where I would be willing to bear the risk that, in the unlikely event of my car being written off, I would either have to dig into my own pocket to buy a replacement worth the same amount, or live with a lower-spec or older car.
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Old 12-12-2010, 18:56
PaulGP
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I bought a new toyota aygo in march 08 approx 9k - I went online & found a very good company - cost me about 90 for 3 years RTI (return to invoice policy) - toyota wanted 400- it just gave me peace of mind as I never had a new car before. So far I've not had to use it. I have referred 3 or 4 people & get 10 a go reward for me & them.

pm me if you want to take it out & we'll get 10 each.


http://www.click4gap.co.uk/
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Old 12-12-2010, 21:10
zippydoodah
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Peeps. Many thanks for all your advice. I know they were determined to get me to buy it even saying they could do me another deal before we swap cars. I know the 99 thats quoted on click4gap is a lot cheaper than what the car company was offering. Touch wood, I have been very careful over the 16 years I've been driving. I know they say "never say never" Its just the cost of the cars but like someone said above, will it be spending money for the sake of spending money.
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Old 12-12-2010, 21:27
PaulGP
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Peeps. Many thanks for all your advice. I know they were determined to get me to buy it even saying they could do me another deal before we swap cars. I know the 99 thats quoted on click4gap is a lot cheaper than what the car company was offering. Touch wood, I have been very careful over the 16 years I've been driving. I know they say "never say never" Its just the cost of the cars but like someone said above, will it be spending money for the sake of spending money.
Have a think about it - I think they give you 30 days after purchase to take it out. You can be as careful as you can be & still get your car stolen or shunted up the back. You are paying a lot of cash for a new car -what's 99 on top? I hate all insurances - have never claimed anything over the last 30 years - but when I bought my new car it just gave me a little peace of mind.

Whatever you choose to do - good luck with your new cars.
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Old 12-12-2010, 21:36
stickler
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I honestly thought that Gap insurance was only for when you were buying a car on credit - and that it would pay out to cover the cost of the outstanding interest on the credit agreement (which in your case will probably be thousands above what the cars are worth).

So I'm a bit puzzled really. Of course a car you drive new off the forecourt has already fallen in value, and I don't think anyone would expect an insurance company to cough up that exact price if you were unlucky enough to write it off in the first couple of months - and if you did, you'd have to replace it with a slightly cheaper vehicle or put a bit of cash towards any settlement to buy another brand new one exactly the same.

That's my take on it anyway.

I'm assuming that you're paying cash for the cars rather than credit - but if you are having them on credit then the gap insurance is definitely something to consider.

If you wrote one of the vehicles off, you will owe the outstanding amount on the credit agreement, and that would potentially run into thousands above the value of the car.
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Old 12-12-2010, 21:41
PlatinumSteve
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When I got my first car, there was a $600.00 GAP rider called GAP Gold, and it was explained that if the car is totalled the loan just disappears. Because it was my parent's buying the car for me, they just took it because the chances that I totaled it wold be higher because I was 17. Haha didn't total the car but was good to have that back-up just in case.
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Old 12-12-2010, 21:41
davidmcn
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a car you drive new off the forecourt has already fallen in value, and I don't think anyone would expect an insurance company to cough up that exact price if you were unlucky enough to write it off in the first couple of months - and if you did, you'd have to replace it with a slightly cheaper vehicle or put a bit of cash towards any settlement to buy another brand new one exactly the same.
I'm no expert either, but I presume you can insure against that risk i.e. so you effectively end up with "new for old" insurance, the same as you have for other sorts of possessions.
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Old 12-12-2010, 21:43
zippydoodah
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I honestly thought that Gap insurance was only for when you were buying a car on credit - and that it would pay out to cover the cost of the outstanding interest on the credit agreement (which in your case will probably be thousands above what the cars are worth).

So I'm a bit puzzled really. Of course a car you drive new off the forecourt has already fallen in value, and I don't think anyone would expect an insurance company to cough up that exact price if you were unlucky enough to write it off in the first couple of months - and if you did, you'd have to replace it with a slightly cheaper vehicle or put a bit of cash towards any settlement to buy another brand new one exactly the same.

That's my take on it anyway.

I'm assuming that you're paying cash for the cars rather than credit - but if you are having them on credit then the gap insurance is definitely something to consider.

If you wrote one of the vehicles off, you will owe the outstanding amount on the credit agreement, and that would potentially run into thousands above the value of the car.
To answer the questions above, It won't be on a credit agreement but the car company is aware of this and won't be taking out any finance. Certainly the company mentioned above in this thread mentions that you don't need to have finance.

Effectively whats happening is that you have two insurances. If you write off the car, your own insurance company will pay up to the market value (unless you have a clause otherwise) and the GAP insurance will pay the difference to make up what you pay for the call originally (policy only lasts 3 years though)

I will have another think. The trouble is it was one of three things they offered and all I saw was commission in their eyes.
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Old 12-12-2010, 21:52
PaulGP
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Stickler - So you get your new 10k car nicked or written off after 6 months & are happy to get 8k back from the insurers & buy a cheaper car or cough up another 2k to get back to square one.

BTW - I think some insurers will give you the full purchase value back for a limited period - possibly 1 year - this varies with policies - so with gap you are covering the second year onwards.
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Old 12-12-2010, 22:08
PaulGP
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The trouble is it was one of three things they offered and all I saw was commission in their eyes.
I agree - I saw this in the showroom as well - they will try to sell you everything & anything - that's why I looked for a comparison online.

When you buy your new cars - make sure you turn the tables on them - ask for all you can - full tank of petrol - boot liners - extra oil, extra mats etc etc get what you can from them. One of the biggest cons (don't fall for it) is Supaguard - it's a wax covering thing- don't go for it - they'll charge you a lot for something that is not very good at all!
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Old 12-12-2010, 22:12
stickler
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Stickler - So you get your new 10k car nicked or written off after 6 months & are happy to get 8k back from the insurers & buy a cheaper car or cough up another 2k to get back to square one.
If that was the case, then yes the insurance is worth it. But it depends on the offer you get from your insurance company, I'm not sure you would lose 20% of the value of the car in six months, if that was the case I wouldn't be buying that car.

I've had a car written off and I was amazed and very pleased by the offer from the insurance, I'd had the car two years and loss less than 1,200 on what I paid for it and the settlement was more than fair.
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Old 12-12-2010, 22:15
tony13579
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My sister bought a 27k landrover 3 months old. She took Out gap insurance. When the landy was stolen from burmingham airport long stay, the insurance paid out 17k and the gap paid 10k. She had to find the extra 6k to get the list price of a new Landy It still cost her a few grand to reach the current list price.

Gap insurance is a good idea on high value cars as they depreciate faster.
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Old 12-12-2010, 22:46
Rebel MC
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To answer the questions above, It won't be on a credit agreement but the car company is aware of this and won't be taking out any finance. Certainly the company mentioned above in this thread mentions that you don't need to have finance.

Effectively whats happening is that you have two insurances. If you write off the car, your own insurance company will pay up to the market value (unless you have a clause otherwise) and the GAP insurance will pay the difference to make up what you pay for the call originally (policy only lasts 3 years though)

I will have another think. The trouble is it was one of three things they offered and all I saw was commission in their eyes.
I suppose the odds against you writing off your car are pretty good, on the other hand, in comparison to the amount you're spending, it's not a lot of money.

What I would do is ask them to include it in the price, if they say no, decline their offer and then get a deal independently.
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