When You Should Purchase GAP Insurance


November 27, 2019 By Mike
Last updated on November 27, 2019

There is one type of insurance which is often overlooked but actually a type that all motorists should consider – GAP insurance. GAP insurance is an optional policy which will cover the shortfall between the insurance payout and the amount originally paid/outstanding when you purchased the vehicle. Due to depreciation, this could be by an enormous amount which could otherwise leave you seriously out of pocket.

Some people say that GAP insurance is not worth it but it should certainly be considered in a few cases, such as:

Car Purchased on Finance

If you purchased the vehicle on a finance agreement then you should certainly consider GAP insurance. This is because without, you could end up owing more than what the insurance company pay in the event of a write off. GAP insurance will pay the finance money enough to cover the gap which could be a large amount.

Car Which Loses Value Quickly

It is also worth considering if you have purchased a vehicle that loses its value quickly. This includes a new car, which can lose as much as 35% of its value after just one year of ownership and 60% after three years. In addition to the age of the car, the make and model can also alter the rate of depreciation so this is something that you should always be aware of when purchasing a vehicle.

Lease

If you are leasing the vehicle then GAP insurance is also a smart purchase. A write off could see you ending up owing the hire company more than what a comprehensive insurance provider pays out in the event of a write off which could leave you struggling to be able to afford the payments on a vehicle that you no longer have.

A Smart Investment

Many people think that GAP insurance is not necessary because they will never write their vehicle off, but accidents occur constantly on the roads and these can often not be your fault. Additionally, a vehicle is written off if stolen and never recovered and car crime is a big problem in this country. Therefore, it is worth going to a specialist and arranging GAP insurance for your car, particularly if you fit into the above categories – click here to find out more.

GAP insurance is an optional insurance policy but it is an intelligent level of cover to opt for, particularly if you have bought the car on finance, it depreciates rapidly or if it is a lease deal. In addition to important cover, this can also provide peace of mind knowing that you are protected.