Wadders
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| posted on 10/8/11 at 07:37 PM |
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Gap Insurance
Not toy related....Mrs Wadders is buying a new tin top, (5 months old) and is considering taking out gap insurance.... I know sod all about it so
could do with some advise to pass on
A- Is it worth it? and B- If yes who offers the best deals?
TIA
Al. 
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ChrisLeary
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| posted on 10/8/11 at 07:54 PM |
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Evening,
I'm by no means an expert about it, but basically gap insurance pays out the original cost of the car if it written off beyond economic
repair.
So if you buy the car on finance over 5 years for £10,000, and at 4 and a half years the car gets written off, the gap insurance pays out the £10,000
you originally paid.
I'm pretty sure thats how it works.
I took it out once on a car I bought from a car supermarket thing, but unless you're planning on writing it off just before the finance ends to
get your moneys worth, i don't think it's worth it, but it's the risk factor then, just incase it does happen by accident.
Personally I'm now a tight a*se and wouldn't pay for it, but it's swings and round-abouts.
I hope that helps a bit anyway.
Chris
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hootsno1
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| posted on 10/8/11 at 08:01 PM |
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gap insurance is good but only pay for it monthly, that way if you have to make a claim olnce you have been paid out you can cancel the policy,
It works like this
If the car cost £20000 and the insurance pays you out £15000 the gap insurance will make up the rest of the cost to the full invoice. and if you just
happen to total the car just b 4 the end of the term thay still pay out!!!
If a little hammer won't fix it get a bigger hammer
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Jon Ison
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| posted on 10/8/11 at 08:03 PM |
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I understand GAP to cover just that, the "gap" between what the insurance pay out and what finance is owed should the car be written off.
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scootz
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| posted on 10/8/11 at 08:20 PM |
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quote:
Originally posted by Jon Ison
I understand GAP to cover just that, the "gap" between what the insurance pay out and what finance is owed should the car be written off.
+1
It's not the gap to the purchase price, but to the finance figure owed on the car (which is often waaaaaay above the cars value!!!).
It's Evolution Baby!
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mookaloid
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| posted on 10/8/11 at 08:21 PM |
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It can cover either just the GAP (cheaper) or roll back to full invoice value (expensive). It was really designed to cover the difference between what
you get paid out if it is written off and the amount of finance outstanding on it if in negative equity - this is the real GAP. The roll back to
invoice value idea came later.
So if you buy a new car on finance with a £100 deposit and the minute you drive it out of the showroom it loses say £2000 value (say) then if you
wrote the car off on the way to fill it up with fuel - at its most basic it would cover the difference between the written off value and the
settlement value of the loan which would still stand at the purchase price less £100.
This really comes into its own when you think about how a car depreciates (not a straight line) and how the loan balance goes down (straight line) as
you pay it off.
"That thing you're thinking - it wont be that."
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scootz
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| posted on 10/8/11 at 08:30 PM |
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quote:
Originally posted by mookaloid
... it would cover the difference between the written off value and the settlement value of the loan which would still stand at the purchase price
less £100.
I thought that the loan interest amount goes straight onto the figure owed the minute the deal is signed and sealed?
Ergo, if you bin it on your way out of the dealership, then you still owe your £20k purchase fee + a percentage of the interest?
It's Evolution Baby!
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Wadders
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| posted on 10/8/11 at 09:57 PM |
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So assuming no finance is involved, its really like having an agreed value policy ? i.e they will pay out your original purchase price should the car
be stolen or written off. Must be expensive, cos i imagine plenty of people would abuse it and have their car disappear after a few years ...
Al
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Ninehigh
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| posted on 10/8/11 at 10:21 PM |
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Kind of, only it's agreed to be valued at the amount of outstanding finance (if that value is more than the value of the car)
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