What is the Best Type of GAP Insurance For You?

When it comes to safeguarding your vehicle investment, choosing the best type of GAP insurance policy for you is key. Exploring the different options available ensures you find the ideal coverage that perfectly aligns with your needs. 

Car purchases often come with unforeseen financial risks, and while standard auto insurance covers damages or theft, it might not account for the full cost in certain scenarios. That's where Guaranteed Asset Protection (GAP) insurance steps in as a protective shield.

GAP insurance is a supplementary coverage that safeguards you from potential financial losses beyond what typical auto insurance covers. It's a solution designed to bridge the ‘gap’ between what your car insurance provider pays out in case of an accident or theft and the remaining amount you owe on your car loan or lease.

What Are The Different Types of GAP Insurance?

When it comes to GAP Insurance, one size doesn’t fit all. At MotorEasy we offer four different types, meaning you are sure to find your perfect match! What are they you may ask? Read on to learn more:

Return to Invoice (RTI)

Return to Invoice GAP Insurance provides comprehensive coverage by considering the greater value between the motor insurance settlement or the Glass’s Guide ‘Retail Transacted’ valuation at the time of total loss. It takes into account the net invoice price initially paid for your insured vehicle or the amount needed to settle the outstanding finance balance, ensuring you receive the maximum benefit based on the greater value between these factors.

Return to Value (RTV)

With Return to Value GAP Insurance you will receive the higher value between the settlement from your motor insurance or the Glass’s Guide ‘Retail Transacted’ valuation for that month. Your initial insured value at the policy's start date is also factored in, providing comprehensive protection for your valuable asset.

Contract Hire GAP Insurance

Designed for leased vehicles, Contract Hire GAP Insurance covers the difference between the insurance payout and the remaining lease amount. 

It's particularly helpful for lessees as it safeguards against potential financial gaps in the event of a write-off. However, it's limited to leased vehicles and may not cover additional lease charges.

Finance GAP Insurance

Finance GAP Insurance addresses the shortfall between the outstanding finance amount and the insurance payout. 

It's suitable for vehicles bought on finance, ensuring that in the case of a total loss, the loan gets paid off. Yet, it might not encompass certain fees or charges related to the finance agreement.

Each GAP insurance type serves a specific purpose, tailored to different ownership or leasing scenarios. Understanding these differences offers car owners the necessary knowledge to select the most fitting coverage based on their vehicle purchase or leasing agreements.

Benefits of GAP Insurance

GAP Insurance offers many benefits including:

1. Protection Against Depreciation: Cars depreciate quickly, often faster than you repay the loan. GAP insurance protects you from this ‘gap’, ensuring you're not paying off a loan for a vehicle you no longer have.
2. No Out-of-Pocket Expenses: With GAP insurance, you won't face unexpected financial burdens if your car gets stolen or written-off. It covers the shortfall, preventing you from having to dip into your savings to settle the remaining balance.
3. Complements Standard Insurance: While your standard auto insurance covers the current value of your vehicle, GAP insurance extends the coverage to bridge the gap between the depreciated value and the loan amount.

When you buy your GAP coverage with MotorEasy, you also get access to exclusive members only benefits, such as:

1. Savings on MotorEasy maintenance and repairs.
2. A FREE MotorEasy account, giving you access to all of your car’s details, essential documents, timely reminders and motoring offers.
3. Coverage of up to £1,000 in motor insurance excess.
4. Optional extras and accessories are also covered (when they are factory or dealer fitted).
5. Coverage for European road trips for up to 30 days.

When to Purchase Gap Insurance

The ideal moment to purchase GAP Insurance is as soon as you acquire a new vehicle. This proactive approach ensures you're covered from the outset, protecting your investment comprehensively. 

However, the urgency of purchasing GAP Insurance might vary based on different scenarios:

• New Car Purchase: When buying a brand-new vehicle, it's wise to arrange GAP Insurance immediately. New cars often depreciate rapidly, and having GAP coverage right from the start offers maximum protection.
• Used Car Purchase: For used cars, the ideal time to consider GAP Insurance is when the vehicle's value is relatively high compared to its depreciation curve. It's essential to evaluate the car's market value and assess whether GAP coverage would be beneficial.
• Leased or Financed Vehicles: If you've leased or financed a vehicle, securing GAP Insurance becomes crucial right at the inception of the agreement. This ensures you're safeguarded against potential financial gaps in case of a total loss.

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 expose you to a higher risk, as the gap between the car's value and what's owed 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.

And there you have it - the road map to understanding what the best type of GAP Insurance for you is, and making the best choice for your peace of mind.

At MotorEasy, we get it - your car deserves the best. Our lineup of GAP Insurance plans is crafted with you in mind, offering a smooth ride through life’s uncertainties.

Ready to Hit the Road?

Don’t leave your car’s fate to chance. Explore our GAP Insurance options today. Choose MotorEasy and drive with confidence, knowing your car is covered for whatever lies ahead.

Get Your Tailored Quote Now and Drive Worry-Free with MotorEasy!