What’s the Difference Between a 1, 2, 3, 4, and 5 Year GAP Policy?

The main difference between 1, 2, 3, 4, and 5-year GAP Insurance policies is the length of cover. A shorter policy may suit a short-term lease or PCP, while longer policies are better for hire purchase or cash buyers planning to keep the car for years. Dealers often cap policies at 3 years, but specialist providers may offer up to 5 years.

Policy length options · Which term suits you best · Other factors · Related links

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Policy length options

1 year: Rare. Usually only used as a short-term cover or a 'stop gap' solution. (Total Loss GAP do not currently offer 1 year cover)
2 years: May suit very short PCP agreements or drivers who frequently change cars.
3 years: Common with dealer products, designed to match standard PCP terms.
4 years: Better for longer HP finance or owners who plan to keep their car for more than three years.
5 years: The longest cover available, ideal for cash buyers or long-term HP users keeping their car.

Which term suits you best

There are several considerations or options available.

Match your policy to the length of your finance agreement if on PCP or HP. However, if you plan on changing before the end of the finance agreement, you do not need to match the finance length.
Cash buyers often choose 4 or 5 years to cover their whole ownership period.
If you frequently change cars, a shorter policy may be more cost-effective.

Please note that the GAP Insurance length you choose initially is the longest time that particular type of GAP cover can cover for you. GAP Insurance is not generally renewable, extendable, nor can you buy a new policy of the same type when your current policy ends. If you choose a longer option and change early, you typically have options for transfer or cancellation.

Other factors to consider

Vehicle age and mileage: Older cars or higher-mileage vehicles may not qualify for all types of GAP. For example, Vehicle Replacement GAP may be capped at a vehicle of 4 years of age, and up to 40,000 miles when you buy the GAP Insurance cover.
Policy type: RTI and VRI can be up to 5 years; Lease & Contract Hire GAP is usually capped at 4.
Claim limits: Longer terms may need higher claim limits to stay effective.

Total Loss GAP Tip: It is important to remember that you cannot extend your GAP Insurance at the end of the policy term. Buy the length of cover you need. If you change early, then you should have transfer or cancellation options available.