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What is GAP insurance - and how can it save you money?

Published on Wednesday 08 November 2017 in Van News

What is GAP insurance - and how can it save you money?

You can't have your vehicle on the road without motor insurance, right? And even though your cover will be fully-comp, you may still be at risk of losing money if your brand-new vehicle was written off or stolen. So, how can GAP insurance help you? Vanarama's Lexi Birch reports...

Take this as an example: if your vehicle was deemed a total loss and your insurance company decides to pay out £15,000 but then your finance company requires £20,000 to settle your agreement early, you will be out of pocket by £5,000 (shortfall).

"Why would my insurance payout not be enough to cover any shortfall?"


What AM I actually covered for?

Your fully-comp insurance covers the vehicle value and the insurance company is not responsible for any outstanding finance. Insurance companies will depreciate the value of your vehicle as soon as it is driven off the forecourt.

Consequently, this may not be enough to cover any remaining finance. That's why our GAP Protection policy is:

  • Designed to cover a shortfall of up to £20,000.
  • And you can claim up to £250 of your insurance excess back!

All of this for a one-off payment that will cover you for the full term of your contract!


Is GAP Insurance worth it?

Most customers take out GAP for their own peace of mind, to have the reassurance that if anything were to happen to their vehicle, GAP will cover them.

Once your deal is placed through Vanarama, there is a 48 hour 'cooling off period'. From then you will hear from one of our GAP specialists.

There is no obligation to take out the protection, but there is a relatively generous time frame. You have from the initial phone call there is any time leading up to the delivery of your vehicle in which to decide, AND also an eligibility window of up to 60 days once your vehicle has been delivered to you! In no way does this affect the progress of your order.


Am I eligible?

Let's get down to it… GAP is available to almost anyone. With our GAP policy, you will be covered:

  • If you are on any type of finance agreement, including contract and lease hire.
  • If you have a vehicle worth up to £125,000 invoice price.

Pretty straightforward, right? There are of course certain exclusions that apply to our GAP Insurance:

  • If the vehicle was written off whilst driven illegally, so under the influence of drugs or alcohol.
  • If the vehicle was left unattended with the keys still in it or the alarm not set (providing it has one).
  • If the vehicle is not covered under a fully comprehensive insurance policy.
  • If the vehicle is used for Hire or Reward.
  • If the vehicle has a Fridge Conversion and has/will have a Motor Traders Insurance Policy.

FUN FACT: 52% of Vanarama's customers have taken out GAP Insurance so far in 2017...

"That's all well and good, but does it work?"


Story time…

On the 1st March 2017, one of our customers had their Ford Transit Custom delivered on the brand new '17 plate. Exactly a week later (the same day their contract went live with the funder), their vehicle was stolen. On a 5-year Contract Hire agreement, this customer's shortfall amounted to approximately £7,000 *Ouch*. Thankfully our customer had taken out GAP Insurance, so they could sleep easy!

However…A member of our Vanarama team had been driving her vehicle for a mere 21 days before it was taken out by a gritter lorry on Christmas Eve and was deemed a total loss. Unfortunately she did not have GAP Insurance, so she had to fork out £3,500. Not quite the Christmas present she was hoping for…who would you rather be?

Fancy knowing more? Feel free to give us a call on 01442 835768 and we'll be happy to help.