What is the Best Type of GAP Insurance For You?
When purchasing a car, it’s important to protect your investment. Gap Insurance ensures you’re not left out of pocket if your vehicle is written off or stolen.
But with different types available, choosing the right one can be confusing. This guide will break down the various Gap Insurance options and help you select the best fit for your needs.
What Is Gap Insurance?
If your car is declared a total loss, standard car insurance only covers it’s value at the time of the claim. Because cars depreciate quickly, this payout can be a lot less than expected. Often, it isn’t enough to buy a similar replacement vehicle or pay off the remaining debt on the car.
However, if you additionally took out GAP insurance, you could be in the fortunate position to have your main insurer’s payout topped-up by your GAP insurer.
The scale of that top-up depends on the type of GAP cover you purchased but can be significant.
In the past year MotorEasy has paid out multiple claims over £20,000 and several in excess of £30,000. That’s not a bad return when you consider the average GAP policy costs in the region or £10 per month, and often a lot less!
Read on to find out which GAP Insurance policy is right for you…
Understanding the Different Types of Gap Insurance
Type of Gap Insurance | Who’s it for | How it works |
Return to Invoice (RTI) Gap Insurance | Ideal for new or used car buyers | It covers the difference between what your insurer pays and the original price of the car. It also includes the outstanding finance balance; whichever amount is greater. |
Return to Value (RTV) Gap Insurance | Best for those who bought a used car from a VAT-registered dealer over 6 months ago | Pays the shortfall between the insurance payout and the vehicle’s value when you first took out the policy. |
Contract Hire/Lease Gap Insurance | Suitable for people leasing a vehicle | Covers any outstanding lease payments or early termination fees if the car is written off. |
Finance Gap Insurance | Designed for those with car finance agreements | Covers the remaining finance balance if your car is declared a total loss. Does not cover negative equity from a previous car finance deal. |
Which Gap Insurance Is Right for You?
Choosing the right Gap Insurance depends on your ownership and financing situation:
- Buying a brand-new or used car? → Consider Return to Invoice Gap Insurance to recover your purchase price.
- On a finance agreement? → Finance Gap Insurance will cover any outstanding payments if your car is written off.
- Leasing a vehicle? → Contract Hire/Lease Gap Insurance ensures you’re not left with unpaid lease obligations.
- Purchased a used vehicle? → Return to Value Gap Insurance is a smart option to protect against depreciation.
Tip: Understanding your vehicle purchase type- cash, finance, or lease-can help narrow down your ideal Gap Insurance policy.
Key Considerations When Choosing a Policy
When selecting a Gap Insurance policy, keep these factors in mind:
- Policy Duration - Choose coverage that aligns with how long you plan to keep your car.
- Claim Limits - Ensure the policy covers the maximum potential gap between the insurer’s payout and your car’s cost.
- Exclusions - Check for mileage restrictions, vehicle age limits, and any modifications that may void coverage.
- Cost vs. Value - Don’t just go for the cheapest policy. Check what is included and the insurer’s reputation.
Tip: Reading the fine print of any policy ensures you fully understand what is covered and avoid any surprises during a claim.
Risks of Delaying GAP Insurance
Delaying the purchase of GAP Insurance can pose several risks:
- Increased Depreciation: As time passes, vehicles tend to depreciate. Delaying GAP coverage might increase your risk, as the gap between the car's value and what you owe on it widens.
- Financial Vulnerability: Without GAP Insurance, you might end up liable for paying off a loan or lease on a vehicle that's no longer drivable due to an accident or theft. This financial burden could lead to unexpected expenses.
Why Choose MotorEasy for Your Gap Insurance?
At MotorEasy, we offer industry-leading Gap Insurance with:
- Tailored coverage - Multiple policy types to suit different needs.
- Fast claims process – Claims settled within 24 hours of an insurance payout
- Competitive pricing – Offers up to 75% savings compared to dealership prices
- Award winning – 5-star Defaqto rated Gap Insurance
Tip: A reputable provider like MotorEasy ensures your claims are handled efficiently and transparently.
Final Thoughts
Understanding Gap Insurance and choosing the right type ensures you’re financially protected in the event of a total loss. Use this guide to determine which policy suits your situation best.
With MotorEasy, you get comprehensive coverage, competitive pricing, and peace of mind.
Don't leave your investment unprotected!
