Different Types of GAP Insurance
There are 3 types of GAP Insurance available to suit your needs:
This policy is designed for motorists who have purchased their vehicle on Finance. This will include Hire Purchase, Lease Purchase, PCP (personal contract purchase), or a bank loan. (See our Lease GAP product if your vehicle is on Contract Hire.)
If your vehicle is declared a total loss during the period of your loan you could find that the amount received from your motor insurance company is less than the amount you still owe on your finance agreement.
Finance GAP will pay the difference between what your finance company require you to pay and what your motor insurer agrees to pay following a total loss to your vehicle. This will enable your finance agreement to be settled leaving you to concentrate on purchasing another vehicle. The settlement is made direct to the finance company.
All insurance policies are aubject to terms and conditions please read the Keyfacts.
Finance GAP should be considered by those motorists who:
- Financed their vehicle with little or no deposit;
- Want to know that their debt will be cleared after their vehicle has been written off.
- Do high mileage as the value of the vehicle is likely to depreciate much quicker than the amount you are paying off on the loan, potentially creating a more substantial shortfall.
This policy is designed for motorists who have purchased their vehicle in one of the following ways:
- Outright Purchase; Or
- Finance (this could be Hire Purchase, Lease Purchase, Personal contract Plans, or a bank loan.)
Vehicles depreciate in value at an alarming rate. If your motor insurer decides your vehicle is a total loss following an accident, fire or theft they will only pay what they consider is the market value for the vehicle. This will certainly be less than what you paid for the vehicle originally.
This can cause a considerable amount of stress for you when you are without a vehicle and you have to find additional funds to replace your vehicle with a new one.
Purchase Price Protection will pay to you the difference between your motor insurers total loss settlement and the original net invoice price you paid for your vehicle up to an agreed benefit level. It can be purchased for periods of up to three years dependent on how long you intend to keep your vehicle for.
If your vehicle is on a finance agreement this payout can be used to clear any outstanding finance and may leave a surplus for to use as a deposit for your replacement vehicle.
If there is no finance the difference between your motor insurers settlement following a total loss and the net invoice price is paid directly to you.
This policy has been specifically designed for vehicles that are funded on Contract Hire or Personal Contract Hire agreement.
In the event the insured vehicle is the subject of a Total Loss the Lease GAP Insurance will pay the difference between the comprehensive motor insurers total loss settlement and the Early Termination charge applied by the vehicle finance company up to a maximum benefit.
The settlement is made direct to the finance company.