Gap Insurance (to cover difference between value of car in event of loss and price paid new) seems to be a good idea.
However, as with all insurance, I want to shop around for best deal but do not know where to start!
Please can other Backroomers give me the benefit of their experience...names of specialists would be appreciated.
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Like all insurance, the expected payout of claims is slightly less than the expected cost of premiums, as the insurer takes their cut (in the past this was not true as premiums made lots of cash on the stock market, but not now). As such, it is only worthwhile if the consequences of being uninsured are too great (e.g. crashing an expensive car while only insured third party) or if you think you can beat the system (i.e. you believe you are more likely to claim than the insurance company thinks you are).
Sorry to be a bore but I am generally anti-insurance a) for the reason stated above and b) because I believe it doesn't encourage people to be careful, thereby increasing the cost of premiums for everyone. Example - protected no claims costs relatively little and some people think it is normal to have a bit of a bump and a claim every now and again as their premiums won't suffer (I don't believe the true cost of this "insurance insurance" is fully costed into the extra £20 or so you have to pay).
Anyway, enough of my rant - if it makes you sleep better at night, go for it.
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I thought mine was a good deal, Gap insurance is generally priced the same everywhere, I've never seen any dealers sell typical 36 month gap at anything other than £299.
I find it worth it, statistically I'm more likely to claim than a 40 year old who has paid the same premium as me. But it is comforting to know that should the worst happen, I still get nearly £10K back off the insuarance company, even up to 3 years from now. This is essential so that I can afford to pay off the outstanding finance on the car, and have enough left over to hopefully buy a slightly older car outright. (Thats my emergency plan should I write off the car that I have now)
Blue
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Is gap insurance available/worth it if you've paid cash for you car?
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Yep, my gran paid cash for her used Focus and she got given Gap as part of the deal. She cudda paid for it tho. Whether it's worth it is up to you I suppose, at least she know that she gets the purchase price back up to 3 years after purchase, but wud y noramlly pay £300 for the privelage, in my situation i would consider it, but I suppose it's each to their own...
Blue
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It's also cheaper than Tracker or similar theft detection devices! When I bought my latest car, with GAP insurance included, and asked the dealership about having Tracker fitted, they said no need as I had GAP insurance, and would I want my car recovered after some scroat had thrashed it about.
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You need to do some maths. How much of the value of the car are you borrowing and over what time? I was offered a flat rate of 3.8% over two years for a £9k loan - the car was bought for £13,000. I refused gap insurance as the repayment every month would reduce the outstanding balance by a significant amount, very little of the payment was for interest, as I was only borrowing over two years.
As for the Tracker comments one of the bonuses is the car is found quickly therefore the scroats have less chance of thrashing it! Remember insurance won't consider a claim for theft for 6 weeks and you have to cover the cost of a hire car.
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Bear in mind that if you buy a new car some insurance companies offer to replace the car with an equivalent new one if it is written off in the first year. This makes gap insurance (even) less worthwhile. It's worth doing the sums as daveyjp suggests; odds are you don't need it, or the amount at risk is the cost of the gap insurance...
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Wasn't aware of a 6 week window. Doesn't mention that in my policy documents. Is this an industry standard?
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Worth mentiong that there are two types of Gap insurance, Invoice Gap, and Finance Gap IIRC.
I got Invoice Gap as I am actually borrowing very little from Ford Credit, all the Invoice Gap does is ensure that you get back the full purchase price of the vehicle.
I still personally find it comforting that I'm still covered after my first year for a new car, 'cos I couldnt afford one otherwise...]
Blue
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