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Vehicle Replacement Gap Insurance: A Guide to Protecting Your Car


What is Vehicle Replacement Insurance, and why should you consider protecting your car with what we consider the ultimate form of cover?


Vehicle Replacement Gap Insurance is designed to cover between the motor or car insurance company's settlement on the day your vehicle was written off and the higher of either.


  1. The amount outstanding on your finance agreement to your finance company, late payment charges and arrears are deducted.
  2. The original invoice price you paid
  3. The cost of an equivalent replacement vehicle the same as yours was on the first day you drove it home. If that model is unavailable, the settlement would be based on the superseding model. The settlement would be based on the original invoice price plus 10% without a superseding model. 


At Total Loss Gap, we consider this the ultimate cover. To be brutally honest, this is because, with this level of cover, it does not matter about levels of depreciation or even appreciation. No one, not even us, can say which level of cover will be best for you as we can not guarantee to know how much your car would be worth. How much will you have outstanding in finance ( if any), or how much will a vehicle be? The beauty of this policy is that it genuinely does not matter. You will get the best financial outcome. You will get whichever gives you the biggest settlement. 


So why choose one level of gap insurance when you can have all three?  



Every Insurance policy has terms and conditions, and we are proud of ours. Remember that not all gap insurance providers or insurance policies are the same. Tiny variations in policy terms can have a massive impact when you make a claim. So, before you buy vehicle replacement gap insurance, why not compare our policies and prices? If you click the link below, our system will open a new page to view our complete documentation.


Vehicle Replacement Gap Insurance Quote  30 Days Cooling off - Money Back Guarantee    European cover for up to 90 days in a calendar year


Our Total Loss Combined Return to Invoice and Vehicle Replacement Policies have the following features as standard.

  1. Uk-based Call and Claims Teams.
  2. Policies Backed by the Financial Services Compensation Scheme.
  3. There are no claim limits for vehicles up to £75000.
  4. Free policy transfer ( eligibility criteria apply).
  5. Only ever cash settlements.
  6. 30-day cooling off period.
  7. Up to 5 years cover.
  8. Pays up to £250 towards your motor insurance excess *
  9. Available for new cars and vans as well as vehicles up to 4 years of age with less than 40,000 miles on the speedo/ clock/ mileometer


 * if your motor insurance excess is higher, then you would be liable for any amount over £250.

A Total Loss Vehicle Replacement Policy will always pay you the highest settlement.

Total Loss Vehicle Replacement example

Navigating the world of motor insurance can be a challenging and confusing task.


That's why understanding the different types of insurance available to you is essential. Many believe that a simple, fully comprehensive motor insurance policy is as much as you can do to protect yourself.

However, this is not the case, and relying on your car insurer's settlement to replace your vehicle could leave you out of pocket. Why? Because comprehensive car insurance may only cover the current market vehicle value when you claim. If that results in the vehicle being written off by your motor insurer, the amount they offer could mean that you could be left with outstanding finance to pay, AND you need to replace it, too.


Here, we will delve into the policy details, exploring how it works and can complement your motor insurance coverage, as well as the key differences and advantages compared with other types of Gap Insurance coverage.


How Vehicle Replacement Gap Insurance Works 


An example of how a VRI Claim would be settled.                      

  • You purchase a new car for £30,000.
  • After a few years, your car's market value depreciates.
  • Your car is stolen or deemed a total loss in an accident.
  • Your primary motor insurance only compensates you for the market value of £20,000.
  • A brand new, equivalent car is now £35,000
  • Vehicle Replacement Gap Insurance covers the £15,000 difference between your motor insurer's current market value settlement and the cost of the new replacement; this allows you to purchase a new car of the same make, model, and specifications without incurring additional expenses. 


How many years of Vehicle Replacement Insurance do you need?

We would only ever recommend buying a policy for the length of time you hope to keep your vehicle. We say this because you are only eligible for cover during the first 180 days of ownership. Thus, you would no longer be eligible at the end of your policy. While we can offer alternative cover, it is nowhere near as comprehensive as a vehicle replacement policy. During a sample data set, most of our policyholders purchased four-year policies, followed by three years, with the remainder being split ( although slightly weighted ) between 2 and five years. 



Number of policies purchased as a percentage of sales  Data set taken as a percentage of Vehicle Replacement Policies Sold

Who buys Total Loss Vehicle Replacement Gap Insurance?


We provide a lot of vehicle replacement policies to BMW owners and the least amount to Lotus owners.

We have supplied Total Loss Vehicle Replacement policies covering over 40 manufacturers from Abarath, Jeep, and Mann to Volvo. The data set was so large that displaying it was impossible. Instead, we have chosen to show our top ten manufacturers.

We hope this shows that no matter what vehicle you have, you can benefit from knowing that should the worst happen, you have the peace of mind of knowing that your policy will perform.

( Data taken from Total Loss Vehicle replacement policy sales between July and October 2023 shown as a percentage) 


Key Differences Between Vehicle Replacement Gap Insurance and Other Types of Gap Insurance


There are several types of Gap Insurance available, but two main types are:


Some key differences between Vehicle Replacement Gap Insurance and these other types of return to invoice gap insurance and finance or contract hire gap insurance:


  • Coverage Amount: Vehicle Replacement Gap Insurance covers the difference between your car's market value and the cost of a replacement vehicle. This considers both the depreciation of your current car and any increased replacement costs. In contrast, Return to Invoice Gap Insurance covers the difference between your insurance company's settlement and the original purchase price. Finance/Lease Gap Insurance covers the remaining balance on your financing or lease agreement.


  • More Applicable Situations: Vehicle Replacement Gap Insurance is ideal for individuals who want to ensure they can replace their vehicle with a new one in case of total loss or theft. In particular, this can be where you have a good discount, or the manufacturer is about to update the model, and the replacement cost will probably increase. Return to Invoice Gap Insurance is suitable for those who wish to recoup their initial investment, while Finance/Lease Gap Insurance is best for individuals with outstanding loans or leases.


Vehicle Replacement Gap - the most comprehensive choice?

Vehicle Replacement Gap Insurance offers a range of benefits, including:

  • Protection Against Depreciation: This insurance accounts for the depreciation of your vehicle, ensuring you can replace it with a new one without additional out-of-pocket expenses.


  • Protection Against Inflation: If the cost of the equivalent replacement vehicle rises above the original invoice price you paid, then this increase in cost can be added to your settlement too.


  • Financial Security: If your vehicle is declared a Total Loss, you won't be burdened with replacing your car.


  • Peace of Mind: Knowing you're protected in unforeseen circumstances can give you peace of mind as a car owner. These include how much your current car will lose in value and how much you will need to replace it if it is written off or stolen.

Quick Vehicle Replacement Quote  All named drivers are covered. T&C's apply  Your Total Loss VRI only ever pays a cash Settlement

All named drivers over 18 years of age with a full UK licence named on your fully comprehensive motor insurance policy.

Vehicle Replacement Gap vs Return to Invoice Gap - when and why VRI may be a better choice


Vehicle Replacement Gap Insurance may be better and more comprehensive than Return to Invoice (RTI) Gap Insurance in certain situations. Here are some reasons and examples of where Vehicle Replacement Gap cover can be a better option:


1. Protection against increased vehicle prices



Vehicle Replacement Gap covers the cost of a brand-new replacement vehicle of the same make, model, and specifications as your original car, even if the price of the new vehicle has increased since you bought your car.


For example, let's say you bought a car for £30,000, and after a few years, its market value depreciated to £20,000. This is what your motor insurer pays. If the price of a new, equivalent car has increased to £35,000 due to factors like inflation, market fluctuations, or increased demand for new cars, Vehicle Replacement Gap Insurance would cover the £15,000 difference, allowing you to purchase a new, equivalent vehicle without additional out-of-pocket expenses.


In contrast, RTI Gap Insurance would only cover the £10,000 difference between the market value (£20,000) and the vehicle's outright original purchase price (£30,000), leaving you with a £5,000 less in settlement to cover the increased cost of the new car.


2. Coverage for discontinued or updated models


If your car's specific make and model has been discontinued or significantly updated since your purchase, Vehicle Replacement Gap Insurance can be beneficial. In this case, the insurance will cover the cost of a new, equivalent vehicle that is closest in specifications and features to your original car.


In contrast, RTI Gap protection only covers the difference between the market value and the original purchase price. This claim amount may not cover the cost of a new, equivalent vehicle with updated features or a newer model.


In summary, Vehicle Replacement Gap can be a better and more comprehensive option than RTI Gap Insurance in various situations. It provides better protection against increased vehicle prices, offers comprehensive coverage for vehicles with significant depreciation, and ensures coverage for discontinued or updated models.


Vehicle Replacement Gap or VRI Gap Insurance - The Total Loss Gap Advantage


There are many Gap products bearing the name Vehicle Replacement Gap. However, they can be very different in how they can cover you. Buying this type of Gap Insurance from Total Loss Gap can provide you with several advantages.


These include:


3 in 1 cover - A combined Invoice and Replacement Gap is our product. This means that Total Loss VRI Gap Insurance can protect you, if your vehicle is declared a write-off or theft, between the motor insurer settlement and the HIGHER of:

  • the replacement cost of the equivalent vehicle
  • the original price you paid
  • the outstanding finance settlement


If the original price you paid exceeds the replacement cost, you do not lose out. In that circumstance, we will revert to the higher invoice price you paid instead of the lower replacement cost.

This may not happen often in a claim, but knowing you are getting the best possible outcome is good. You also do not need to choose between a Return to Invoice Gap and a Vehicle Replacement Gap when you buy your vehicle. This policy takes the guesswork away.


Cash settlement - Our VRI policy provides a cash settlement. Unlike others, we do not seek to supply your next car for you or dictate what car you get next. Cash settlements give you the choice of what you drive next.


Additional protection for discontinued models - If your car's manufacturer stops production in the future, it can be impossible to calculate the replacement cost of your vehicle. Other VRI products would revert to the original invoice price you paid. However, we feel that is not giving you full value for a replacement cost, as you have bought the policy expecting the replacement cost to increase. So, with Invoice and Replacement Gap from Total Loss Gap, if no equivalent replacement vehicle is available, your settlement will be based on an extra 10% on top of the original invoice price you paid for the vehicle.


A nationally recognised Gap product - Total Loss Gap, has been featured on many consumer and car owner websites. It is also the current (as awarded in 2021) AutoExpress 'Best Buy' for Gap Insurance in the UK


When you compare a Total Loss Gap VRI Gap with other providers, please do not assume you get all these benefits and features. It could be a costly mistake in the event of a claim!



VRI GAP Insurance warning - not all Vehicle Replacement Gap products are the same


There can be an assumption that any Gap product bearing the Vehicle Replacement name will be the same. In reality, this is not the case, and if you are not careful, picking the wrong one could mean a difference of thousands of pounds in a claim.


What do you need to look for?


How are settlements made?


There are a couple of aspects to check here. Firstly, how will the insurer make the VRI settlement to you? There are a couple of ways this can be done.

  1. A cash settlement - making a cash settlement to you usually means you can replace the vehicle as you see fit. If you want the same car again, you will have the money. However, if you're going to get a completely different vehicle, you have the cash to do so. That is fine if this means adding to the money you have in a settlement. However, if you want to get something smaller or cheaper, you can do it also.
  2. A physical replacement - some VRI Gap insurers will look to provide you with a replacement car themselves. In this case, they could request a pro forma invoice from a VAT-registered motor dealer for the same replacement car or negotiate and purchase the vehicle for you.


There are a couple of further issues to consider with the second option. If you have been in an accident or were considering changing the vehicle as it does not suit your needs, being forced into a replacement may not be ideal.


The second issue comes when you refuse the offer of a replacement vehicle of the insurer's choice. If you do this, they may reduce your settlement to the original invoice price you paid for the original car. If you compare this to a VRI policy that pays out a payment for the replacement vehicle in cash, you may lose thousands of pounds in your settlement.


What happens if there is no direct replacement or superseding vehicle available?


Vehicle manufacturers can discontinue models, which leaves an issue in determining what replacement costs are used in a settlement. Again, some VRI products will revert to the original invoice price you paid with no direct replacement available.


However, we offer an added advantage and value at Total Loss Gap. If there is an equivalent replacement vehicle to use to calculate the replacement cost, then with a Total Loss Gap Invoice and Replacement Gap (our version of VRI), we will add 10% to the invoice price you originally paid. 


This is an extra 10% payment, in cash, that you would not get from other VRI products that only used your original invoice value.


Frequently Asked Questions for VRI GAP Insurance  


Who should consider Vehicle Replacement Gap Insurance?

  • Vehicle Replacement Gap Insurance is ideal for those who want to ensure they can replace their vehicle with an equivalent replacement in case of total loss or theft, especially if they are concerned about depreciation AND appreciation of the replacement.


When is VRI Gap cover not the best option or not needed?

  • When you have 'new for old' on your motor insurance, AND you do not need Gap cover for longer than this motor insurance feature is in force. Some motor insurance products provide a brand-new replacement vehicle instead of a financial settlement in the event of a total loss or theft. This is normally for the first year of ownership of a brand-new vehicle, but some motor insurers may extend it longer. This will be subject to eligibility plus terms and conditions being met. If you are happy with these terms, and you do not need longer than this cover is in place, then you may not consider VRI Gap cover necessary at all.


  • You may have paid the full manufacturer's retail price for the vehicle. Where this happens, you may not see any advantage of VRI Gap over RTI Gap as there may be little prospect of the replacement vehicle costing more in the future.


How much does Vehicle Replacement Gap Insurance cost?

  • The cost of Vehicle Replacement Gap cover varies depending on factors such as the vehicle make, model, and value, as well as your location and chosen insurance provider. Shopping around and comparing quotes is essential to find the best policy at the most competitive price.


  • The relative premium cost of a VRI Gap policy compared with an RTI Gap policy will be more. This is because the VRI product can pay out more in a settlement.


Can I purchase Vehicle Replacement Gap Insurance for a used car?

  • Yes, some insurance providers offer Vehicle Replacement Gap Insurance for used cars. However, the coverage may be limited and less comprehensive than for a new car. Be sure to check with your insurance provider for specific details and restrictions.


  • For example, with Total Loss Gap, our VRI product is only available for vehicles up to 4 years old at purchase. This is compared to a maximum of 8 years old for Return to Invoice Gap eligibility.


When should I buy Vehicle Replacement Gap Insurance?

  • The best time to purchase Vehicle Replacement Gap is when you buy your new vehicle, as This level of cover is designed to protect your investment from the start. Some providers may allow you to purchase this coverage within a specific timeframe after purchasing your vehicle, so you must check with your chosen insurer for specific details.


How long does Vehicle Replacement Gap Insurance last?

  • A Vehicle Replacement Gap policy typically lasts for the duration of your motor loan or lease agreement. However, some policies may have different terms, so it's important that you review the specific details of your chosen policy.


  • With Total Loss Gap, we can offer our VRI Gap policy for between 2 and 5 years.


What else can VRI GAP cover in a claim?

  • There may be several features that a Replacement style policy can cover. These include a contribution to the motor insurance excess deducted by the motor insurer in a claim. Other aspects, like dealer-fitted accessories, may also be covered, depending on the individual terms and conditions.


Can a Vehicle Replacement policy cover finance settlements?


  • By adding the VRI settlement to your motor insurer's settlement, you can pay any outstanding finance due to the finance company on Hire Purchase, PCP or even a personal loan. Once you have paid off the finance agreement, the remainder of the settlement is yours.


In conclusion, a Vehicle Replacement Gap policy is an excellent option for car owners who want to ensure they can replace their vehicle with a brand new car (or an equivalent replacement car if used) in the event of a total loss or theft.


VRI Gap coverage offers protection against depreciation, financial security, and peace of mind, making it a valuable addition to your overall car protection package. 


By understanding the key differences and advantages compared with other Gap Insurance policies, we hope you will have all the information you need to make an informed decision and choose the best policy for your needs.

IPID for Total Loss Vehicle Replacement Policies purchased from June 24Total Loss IPID From June 2024                      T&Cs for Total Loss Vehicle Replacement Policies purchased from June 24Total Loss VRI GAP From June 2024

IPID for Total Loss Vehicle Replacement Policies purchased from Feb 24Total Loss IPID From February 2024                T&Cs for Total Loss Vehicle Replacement Policies purchased from Feb 24Total Loss VRI GAP From February 2024

IPID for Total Loss Vehicle Replacement Policies purchased after March 2023Total Loss IPID After March 2023                      T&Cs for Total Loss Vehicle Replacement Policies purchased after March 2023Total Loss VRI GAP After March 2023