Why? Because a car’s insurance settlement is almost certainly going be based on its value at the time of the loss, and not on its value when you bought it.
Thanks to the spectre of depreciation, which knocks 50% or more off the value of a brand-new car in the first 3 years of its life, there can be a huge difference between those two amounts. Even fully comprehensive insurance doesn’t protect you from this pitfall.
GAP Insurance does. Although GAP actually stands for Guaranteed Asset Protection, the GAP acronym is pretty apt. The settlement from this safety net policy bridges the financial space between your motor insurer's settlement and, depending on the type of policy you have, the original amount you paid for your vehicle or the real-world cost of replacing the vehicle, or any outstanding finance if this is the higher amount at the time of the write off.
You may have been offered GAP insurance by the dealer when you bought your car. They may have called it something different, like Shortfall Insurance, Invoice GAP Insurance, Combined GAP, or Purchase Protection. If you didn’t go for it then, that’s probably because you were put off by the high prices being quoted.
The good news is that you can get GAP insurance peace of mind without having to pay through the nose for it simply by going direct to an insurance company like ALA.
You’ll find that ALA’s GAP policies are much more competitively priced than a dealer’s, but that’s not through corner-cutting. All ALA GAP policies give you the features you’d want without any of the restrictions you don’t want, like ‘market value’ or Glass’s Guide maximum value clauses.
You’ve got 120 days to make a claim, and if you change your car before the expiry of the policy, you can transfer the unused premium over to the new one without having to pay any cancellation fee. The only payment you’d be liable for would be any balance due on the new policy premium.
Whether your vehicle has been bought on finance, for a cash payment, through a personal loan or via a lease or contract hire agreement, ALA’s easy-to-understand range of GAP policies from Vehicle Replacement Plus GAP and Back to Invoice Plus GAP, to Contract Hire Plus GAP and Agreed Value GAP, guarantee you maximum flexibility along with maximum peace of mind.