Return (or Back) to Invoice GAP Insurance


Anyone who has lost their vehicle as a result of an accident, theft, fire or flood damage will know only too well that your average standard motor insurance policy only pays out on the market (ie secondhand) value of that vehicle at the time the claim was made.

The big ‘D’ – depreciation – ensures that this secondhand value is considerably lower than the amount originally paid for the vehicle. The difference between those two values will be your loss – or something a bit more serious than that if you borrowed money to buy it.

You may think it’s best simply to put all this stuff out of your mind and use that saved brainpower to avoid these accidents in the first place. Not a bad plan, but you might want to back that up with an insurance policy that doesn’t leave you financially embarrassed if things go Pete Tong.

A policy like ALA’s Back to Invoice Plus GAP Insurance (also known as Return To Invoice GAP Insurance).

This policy looks after your interests, and indeed your interest if you’re in a credit agreement, by paying the difference between the insurer’s settlement and the original vehicle invoice price or the outstanding finance balance – whichever of those two amounts is higher when you make your claim.

If you don’t have finance, the payout you get is all yours with no strings attached. If you do have finance, the payout will clear it, and anything left over is yours with no strings attached. There are no ‘Market Value’, ‘Glass Guide maximum retail value’, or ‘Pre Approval’ clauses to worry about.

Here’s an example of how Return to Invoice GAP Insurance works.

Your car, which came with an invoice for £20,000, has just been written off. Boo.

At the time of your claim, you owed £21,000 to the finance company.

The normal comprehensive market value insurance payout you’d get might be something like £15,000 – the secondhand value of the car at the time of the claim. It’s scary, but that’s how car insurance works. Maybe you didn’t know that.

Depending on whichever of those two amounts is higher at the time of the claim, Return to Invoice Insurance either pays the finance company the money you owe them, leaving you debt-free on the transaction, or pays you back to the original invoice amount, which in this case was £20,000.

In this case, the higher of the two amounts is the £21,000 you owe to the finance company, so you’d get a £6,000 payout from the Return to Invoice Insurance on top of the £15,000 market value insurance payout, making a total of £21,000.

If, on the other hand, you owed just £18,000 to the finance company, you’d get your £15k market value payout plus £5,000 from the RTI to take you back to the £20,000 invoice price. This is the good bit. After paying up the £18,000 outstanding finance, you’ll have £2,000 over. That’s yours to blow on a nice holiday, or whatever else you fancy. Result.

Return to Invoice insurance is right for you if you think insurance should cover you completely for the financial hit of losing your vehicle. Basically, you’re defusing the ticking time bomb of motor depreciation.

To qualify for Return to Invoice insurance, you need to have bought and collected within the last 180 days a new vehicle or a used vehicle under 10 years old, that’s listed in Glass’s Guide (and not an ‘excluded’ one). The vehicle will either be owned by you outright or be subject to a Hire Purchase or Personal Contract Purchase finance agreement, and it will have been bought from a VAT-registered dealer or internet broker.

Return to Invoice Insurance can be bought for up to 4 years It pays up to £250 of your Comprehensive Insurance excess and makes no charges for any personal detail amendments.