Gap Insurance

[foxyknoxy30]

We are in the process of maybe buying a new car and the car salesperson is pushing for us to take gap insurance.Now I know what this is as worked in insurance but I have never taken it out with any car purchase before.The car is not brand new but a year old and am wondering whether it's just a sales ploy or really worth it? Does anyone have any experience of gap insurance and is it worth it? Thanks

I did buy gap insurance, but not from the dealer. It was much much cheaper by about £250 going elsewhere! I know it's a good idea, but can't remember why....!

Mine was half the price the dealer was quoting for it. To be fair to the salesman, he dragged his feet about setting it up that I was forced to look elsewhere.

Are you buying the car on finance? If the car is written off could you afford to continue the payments as the settlement you receive would, in most cases, be less than the amount outstanding? I always take gap insurance, but get my own quotes

Its probably worth it on a new car as gap in new value and what the insuer will offer you is massive the instant you drive it away. And probably worthwhile if you're acquiring the car on some sort of credit plan.

On a one year old car, I don't really forsee there being a large gap. But it might be worthwhile if you anticipate any difference between insurance payout and remaining credit may be unaffordable.

We've benefited twice from gap insurance, both times to the tune of around £5k, which we would otherwise have needed to find as a lump sum. If the car is worth over £15k and you're taking out finance, I think gap insurance is a must.

Gap insurance itself isn't a con, but the price dealers charge for it is. I used to work for a gap insurance company which sold their policies to dealers for £50 each. The dealers would then sell them on for anything up to £750 depending on the sale price of the vehicle.

If you buy a car on any kind of finance, gap insurance would cover the shortfall if the car was still written off in an accident and you were only paid out the current market value of the vehicle. The newer the car, the bigger the 'gap' is likely to be, and therefore the more valuable it is to have gap insurance if you couldn't afford the difference yourself.

If you decide you want it, search online rather than purchasing it from the dealer. The polices are exactly the same, only much much cheaper. That said, if you find a quote online there's no reason you can't go back to the dealer and haggle on their price; if they tell you they can't it's because they don't want to, not because they can't afford to.

If you will be insuring the car for business use your gap cover may not pay out. It's an exclusion on many of them. Check the small print carefully before you sign up.

These policies make a lot of money for the dealerships

Definitely take it out but shop around. Cars are written off very easily these days and you could be left covering the finance.

We had it at one time and it paid off massively when both our cars were stolen. Both had been bought at only a few months old and were stolen at around 18 months - peak depreciation time. It was great but I do wish the cars had not been stolen!

Agree with PP - it's def worth getting gap insurance, but shop around for the best price (like with all insurances)

Gap is definitely worth, anything else they sell as extras are not.

Definitely worth it. Especially for a higher value car. But don't take the dealers gap insurance. What they tried to charge me came to nearly a grand over the 3 year lease period. I got my insurance for a couple of hundred pounds elsewhere.