So should you buy GAP insurance? You don’t have to; after all, your car may not be stolen or get written off. It’s also worth noting that many new car insurance policies will replace a brand new car if it’s written off in the first year, so check with your insurer before taking out GAP insurance.
However, there are certain situations where GAP insurance may be worthwhile:
If you’ve bought a car using finance or a large personal loan it will help to cover the big shortfall that you’ll struggle to make up if the car is a declared a ‘total loss’.
If the car you’re buying will suffer steep depreciation, taking out GAP insurance is sensible because it will help to make up the difference between the insurance payout and the potentially sizeable cost of replacing the car.
If you’ve bought a car on a long-term lease and it’s stolen, you could be stranded with a hefty bill for outstanding finance – as well as the cost of replacing the car – so GAP insurance will help to protect you in this scenario.
If your insurer has the first year covered, but you want to take out GAP insurance to cover the second and third years of ownership, some policies allow you to defer the cover for 12 months. You may have to buy the GAP cover before the car is six months old, though, so get quotes sooner rather than later.
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