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Deferred GAP Insurance - Total Loss GAP Insurance 365
What is deferred Gap insurance, and why should you consider buying it if your own motor insurance policy gives you "New for Old "?
The scenario: If you buy a brand new car, almost as a perk of buying a new car, your own motor insurance company may offer a new replacement within the first 12 months. So you potentially you may not need Gap insurance until your cars first birhday.
The problem: Relying on your motor insurance company for the first twelve months of your ownership does leave you exposed in the two, three, four and five. If at the end of the "new for old cover "car owners want GAP insurance coverage, they may find that they are no longer eligible. This is because, traditionally, Gap insurance has to be purchased within a set time frame of buying your vehicle. This is often between 90 and 180 days.
The conundrum: If you have a 'new for old' replacement cover with your motor insurer for a year, you may not need GAP Insurance for that period. But, if you leave it a year to buy GAP insurance for further years, you may find you have left it too late to buy any form of cover..
The answer - Total Loss Gap Insurance 365
Motor Insurance "new for old " cover
Many online resources tell readers that they may not want GAP Insurance if their motor insurer also provides " New for Old "
This can happen when:
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you are the first registered keeper for the vehicle (e.g., not a pre-reg or on a contract hire agreement)
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the vehicle is written off in the first year of your ownership.
Big names like Moneysaving Expert, Go Compare, and the Money Advice Service all highlight this.
Yet, and with respect to these experts, they all miss a critical aspect which is that most car owners are likely to own the vehicle for far longer than one year.
So, if something happens after the end of your motor insurance policy 'new for old' cover, then without GAP Insurance, you could face a significant loss on the vehicle.
If you have a finance agreement, you could also face a shortfall to pay.
Deferred GAP Insurance
One way to resolve this issue is to buy a GAP insurance policy and defer the start date to coincide with your car's first birthday.
This means you can buy a Gap insurance policy when you buy the vehicle but simply set the start date to begin a maximum of 365 days from the date of the vehicle's first registration.
Please remember that this will mean you can be covered by your motor insurance policy in year one.
N.B If, for whatever reason, your motor insurance company does not simply provide you with another brand new car, your Gap insurance will not be able to spring into action and help as it will not have started.
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.jpg "Cover for vehicles up to £100,000")
For more information on GAP Insurance options please see our COMPLETE GAP INSURANCE GUIDE
Issues to consider when choosing a 'deferred' GAP cover
Only a small number of GAP Insurance providers offer deferred Gap insurance.
- A few years ago, the option to defer a GAP policy was easy to find, particularly in the open market. Today, only a small number of providers offer this. The good news is that Total Loss Gap is one of them.
You may not met the terms and conditions offered by your car insurance provider to qualify for new replacement.
- Your insurance company may have set criteria that you would have to meet for them to be able to provide a new replacement vehicle. For example a mileage restriction, availability of the new car, available.
?Premiums for deferred gap policies can be higher than premiums for coverage from 'day one'.
- If you buy a Total Loss Gap insurance policy for three years, starting immediately, this may be cheaper than a Total Loss Gap 365 policy for three years or deferred for one year. This is because the deferred policy, even though it is for three years, effectively covers four years' worth of depreciation.
To qualify for a deferred or 365 Gap insurance policy, you must normally be the first registered keeper for the vehicle, AND you must have a " New for Old " cover with your motor insurer in year one.
This normally excludes leased vehicles (perhaps some vehicles on HP, too; you would need to check with your motor insurer and finance company). It would normally exclude pre-registered vehicles also, as you are not the first registered keeper.
You may switch motor insurers at renewal, and the new insurer does not cover you for a replacement vehicle, only 'market value'.
Total Loss Gap 365 - how does it work?
Our version of a deferred GAP Insurance policy is our Total Loss Gap 365 policy. The policy allows the same cover as our premium Combined Invoice and Replacement GAP.
This is available to vehicle owners where:
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they are the first registered owner of the vehicle
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they can prove (at the time of claim) that they had new vehicle replacement cover with the motor insurer in year one
There are two options available for taking out cover.
Option 1
You can set up coverage between 180 days and 365 days from the vehicle's first date of registration. You can set the start date no more than 365 days from the date of first registration.
Option 2
You can set up the Total Loss Gap 365 within 180 days of buying the vehicle and setting the start date no more than 365 days after the date of first registration.
The advantage of option one over option two is that you secure your premium and policy terms for a policy starting in the future. Neither the policy terms nor the premium can change even if they do alter at the time your deferred start date starts.
An example of how Total Loss Gap Insurance 365 can work
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You buy a brand new vehicle on 1st September 2020 for £25,000. You have a new car replacement cover for the first year with your motor insurer.
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You select a Total Loss Gap 365 policy, selecting three years of cover with a start date deferred until 1st September 2021. This gives you a further three years of cover once your replacement cover with your motor insurer ends.
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Your vehicle is written off in December 2023. The motor insurer pays the market value to you at £12,000
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The Total Loss Gap 365 covers between the motor insurer settlement and the higher of either the original price you paid OR the costs of the equivalent new vehicle at the time of claim.
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If we say the cost of the equivalent new vehicle was £27,000 in December 2023, then this is higher than the £25,000 you originally paid.
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In this example, the Total Loss Gap 365 would cover between the £12,000 your motor insurers pay and the £27,000 cost of the new car in 2023.
So if you have a new car, replacement cover in year one with your motor insurer, AND you are looking for further GAP cover for more years, then Total Loss Gap 365 may be a great option.
For a full list of terms, conditions and eligibility, please see the Gap insurance policies below.
( At present, we do not offer finance gap insurance as a stand-alone policy unless you have purchased your vehicle using a form of lease or contract hire)
Total Loss IPID From June 2024 Total Loss VRI GAP From June 2024
Total Loss IPID From February 2024 Total Loss VRI GAP From February 2024
Total Loss IPID After March 2023 Total Loss VRI GAP After March 2023
Total Loss Return to Invoice IPID From June 2024 Total Loss Return to Invoice From June 2024
Total Loss Return to Invoice IPID From February 2024 Total Loss Return to Invoice From February 2024
Total Loss Return to Invoice IPID After March 2023 Total Loss Return to Invoice After March 2023
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Best Buy
Total Loss Gap is pleased to confirm that we have been recognised as the 'Best Buy' for GAP Insurance in the UK by motoring giant Auto Express.
Auto Express undertook an independent survey of various Gap Insurance providers in the UK. They took a standard quote from a franchised primary dealer for a £32,270 vehicle and obtained a quote for three year Gap cover for £449. 
This quote was then compared against many online providers for alternative quotations.
Auto Express highlighted the ease at which a quote can be obtained from the Total Loss Gap website.
It confirmed the premium found at Total Loss Gap was 59% cheaper than the motor dealer at £185.28
Total Loss Gap was the ONLY provider to be given a full 5 out of 5-star rating.
Total Loss Gap was also awarded the 'Best Buy' for Gap Insurance in the UK for 2021.
Auto Express also commented that Total Loss was the only provider they found to allow deferred start dates. This would allow a later start date if the motor insurers' replacement cover covered the car in year one.
In awarding the Best Buy to Total Loss Gap, Auto Express concluded that we were 'Clear, honest and good value.'
A spokesperson for Total Loss Gap said 'We are honoured to be the only Gap Insurance provider to get a 5 Star award and the only Gap provider to get the 'Best Buy' recommendation from such as name as Auto Express."
"At Total Loss Gap, we always strive to provide our customers with the best 'value' with the products we provide. Value can be found in the service we provide, the features you get, and the premium price you pay. It is great to see that an industry giant agrees with us too."
The Auto Express Gap Insurance review can be found in the current magazine and can be found on the Auto Express website also. (CLICK HERE to see)