GAP Insurance

GAP Insurance

Guaranteed Asset Protection

Guaranteed asset protection insurance (GAP insurance) exists to protect your vehicle’s value against depreciation.

As soon as a vehicle leaves a dealership for the first time it depreciates in value. Should that vehicle happen to be stolen or written off for any reason, your insurer will only offer you the value of the vehicle at that moment in time and not its original "as-new" value. It is mostly taken out on new vehicles as they depreciate at a faster rate than used or nearly new vehicles.

GAP insurance bridges the gap between the original value of your vehicle or how much you still owe on the vehicle (depending on the type of policy you take out) and the value an insurer will pay out at the time of a claim, helping you to replace the vehicle without having to come up with more money.

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Allen Motor Group Protect Your Car - GAP Insurance

For example, if a new vehicle cost £10,000 and it was stolen or declared a write-off 3 years later, you would only get its current value, say £4,000, from your insurance company. This would not be enough to purchase a new vehicle of the same value or standard or be enough to repay what you might owe on a finance deal.

GAP insurance may not be suitable if your finance agreement already covers the "gap" or of your vehicle is less than 12 months old and you are the first registered owner as many fully comprehensive insurance policies off new car replacements for the first year of ownership. You would have to check the terms and conditions of your insurance policy thoroughly as this may not be offered if the vehicle is stolen or if any accident resulting in a write-off was the fault of the insured driver. It is also worth checking the terms and conditions of any GAP insurance policy to see exactly what it covers.

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There are 3 main types of GAP insurance.

Finance GAP insurance

If you have borrowed money to buy a vehicle, you might still owe more money than the insurer will pay out. Finance GAP insurance pays the finance company enough money to cover the debt but will not give you more money to buy another vehicle.


Return-To-Invoice (RTI) insurance

This pays the difference between the insurance payout and the original value of a new or used vehicle when you bought it.


Vehicle replacement insurance (VRI)

This pays the difference between the insurance payout and the value of a similar new car (same manufacturer, model, and specification).