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...I believe it is called. For my new Hyundai 1.6 I am offered by GMAC (via the dealer) "equivalent vehicle price" for three years at about £500. "Purchase price refund" would cost less and I do not need "finance repayment" cover. As I haved not written off, or had stolen any of my previous 24 cars (apart from the first, which burnt to death spontaneously after 48 hours) I am sceptical. Comments on the value of such cover welcomed.
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Like all insurance it is good value if you use it! I turned down GAP on my previous Alfa, then had an accident in the snow. I would have been about £9k better off had I taken it! As a result I took it out on my current Alfa, though I shopped around on the internet and think I paid around £250 for 3 years.
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If you're thinking about it, shop around - £500 is expensive.
Regulated product so you should get clear info re benefits of policy and any exclusions/limitations - read carefully!
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I Paid £500 for gap & had my 2 year old jaguar written off by a third party & would of been £9000 worse off had I of not paid for GAP! It was hastle to claim & fortunatley I had proof of history of condition of car etc but I do belive they try & look for an opt out . So keep photographic records & service history & anything you spend on it & as many photo's of accident possible. Disposable camera always carried in my car. Worth its weight in gold.
IJ
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Nice little earner for garage /salesman. Like any insurance you decide if it's worthwhile. I declined. But you bet there's a raft of get out clauses, like '"you have taken it out in the rain sir, we can't give you the full value on that!"
Motor insurures love a 'no claims policy'.
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You can buy it online for way cheaper than the dealer will charge.
Bear in mind that your car insurance will normally replace the car with a new one if it's written off in the first year (sometimes two) assuming you're the first owner.
Edited by Bill Payer on 10/03/2008 at 21:06
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If you're thinking about it shop around
Thanks, Wilco and others. I did, and I wonder where we would be without this site and its knowledgeable conributors! I got cover for £10,000 for 3 years (the amount I expect to loose in depreciation in that period) for £130 from www.directgap.co.uk/. Four other quotes were about the same level.
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You can buy 3 year £5,000 GAP insurance return to invoice cover for about £130 on line so £500 is way over the top.
Whether it is worthwhile or not depends on your attititude to risk and your personal financial situation. Ask yourself if your car is stolen or totalled and you are facing an uninsured loss of £4,000 or so will you just say "that's life" or will you be seriously inconvenienced.
Your existing policy may give you replacement car cover in event of total loss for first year but many do not- check your policy .
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I got out of a commitment to buy it after seeing an earlier thread here (thanks all). Do look on line though if you want it as depending on the cover, a much lower figure is attainable. in addition to return to invoice, there is also cover that gets you a new car, even if the price has gone up (unsure of name).
But, check with your insurer first. Mine, the NFU, gives you what amounts to gap cover for two years (I believe SAGA does this as well). While the NFU does not do anything more, I'd have though some would as the cover needs to dovetail into your existing policy.
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I was offered this on my new Audi for £450 I think. I realise it is good value if you need it, however I feel you have to draw the line somewhere with insurance, otherwise you will end up insuring ever aspect of your life in triplicate.
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If you're still haggling on the deal, Bintang, see if you can get the dealer to throw the insurance in if you really want it. It won't cost him anywhere near as much as he wants from you.
But Roly 93 is right. You can end up insuring everything. Think of all the kitchen appliances policies you get offered and how rarely things actually go wrong.
All insurance is a bet, isn't it?
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All insurance is a bet isn't it?
I think you're buying peace of mind more than anything else. If you're the sort of person that would lie awake in the middle of the night thinking "what if" then a hundred pounds or so is probably well spent.
You can tell how unlikely a write-off event is though, by how cheap the real (not the inflated dealer) premium is.
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Get it if you want it. But, as all above have said, £500 is a laugh. I was offered it for £300. No difficulty getting it dropped to £149 - they offered - and then to £130.
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>>and you are facing an uninsured loss of £4,000 or so will you just say "that's life" or will
>>you be seriously inconvenienced.
But it's not an uninsured loss. You w/o a two-year-old car, you get paid out for a two-year old car. Where's the uninsured loss?
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>>and you are facing an uninsured loss of £4 000 or so will you just say "that's life" or will >>you be seriously inconvenienced. But it's not an uninsured loss. You w/o a two-year-old car you get paid out for a two-year old car. Where's the uninsured loss?
The uninsured loss may be the Finance Money still due on the car - say someone takes a brand new car and buys it on HP over 5 years (to reduce the monthly bill) and it is written off at 2 years.
The bulk of the depreciation is in yrs 1 & 2 say 50% residual value
There is still 60% of a higher figure due to be paid ( 60% of the car cost + 60% finance charges).
Insurance Co pays 50% of the Listy Pric - owner has to settle Finance Co Bill for 60% of the Car Value & Interest.
I appreciate that the car owner can buy a 2 yr old car as a replacement but the Finance Co might not want to wait for 3 years for the rest of the payments.
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but the Finance Co might not want to wait for 3 years for the rest of the payments.
Why not if they were prepared to so before? How has the loan risk changed for them?
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>> but the Finance Co might not want to wait for 3 years for the rest of the payments. Why not if they were prepared to so before? How has the loan risk changed for them?
The car was the security for the loan - car is at the crusher - hence no security - therefore "we want our money now" from HP Co!
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There's a new car to roll the loan into. More likely the old loan is paid off at the time.
And if the car was in negative equity before then it still is.
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