Can GAP Insurance Save Me Money in the Long Run?

Yes, GAP Insurance can save you thousands if your car is written off or stolen, by covering the shortfall between your motor insurer’s payout and the original invoice price, settlement of finance, or replacement cost. For lower-value cars or slower depreciation, the savings may be limited.

GAP Insurance can only help, however, if your vehicle is stolen, or in a fire, flood, theft or accident, and written off by your motor insurer as a total loss.

How GAP saves money · When savings are greatest · When savings may be limited · Related links

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How GAP Insurance can save money

Depreciation cover: Cars can lose 20-60% of value in the first 3 years.
Finance shortfalls: If your insurer payout doesn’t clear your finance balance, GAP can help fill that gap.
Replacement cost: Vehicle Replacement GAP can cover the price of a replacement, equivalent model if prices have risen.
Return to Invoice GAP can help cover the difference between your motor insurer settlement and the price you first paid.

When the savings are greatest

New cars: Biggest depreciation happens in the first 2-3 years.
Expensive vehicles: Premium cars often drop thousands in value quickly.
PCP or HP finance: Monthly payments may not match real depreciation, leaving shortfalls. This is because the rate at which your vehicle depreciates may be quicker than the rate at which you pay off your finance agreement.

When savings may be limited

Older cars: Depreciation is slower and gaps are smaller.
Low-value vehicles: The potential shortfall may not justify the policy cost.
First year of new-car cover: Some insurers offer “new for old” in year one, reducing the need for GAP initially. However, you may be able to defer the start date of your GAP Insurance for more long term cover.

Tip: Buying GAP Insurance online can cost less than dealer products, making savings even greater. See standalone GAP cover. At Total Loss GAP, you can further avoid third-party fees and commissions paid by providers for placements, recommendations or ratings. We do not pay them so you do not have to.