It's a fantastic feeling to buy a new car, however, not so fantastic is the fact that as soon as you drive it off the forecourt it starts to depreciate and lose value.
The issue that arises as a result of this drop in value is that your car insurance provider will usually only pay the current market value of the car should you write it off.
This means there could be a 'gap' between the payment you receive and how much you still owe on a loan or how much you'll have to pay for an equivalent car.
GAP insurance can cover this shortfall - it can cover the gap between the payment you receive from your car insurance provider and the amount you need to pay off your outstanding finance or to buy a replacement car of equal standing.
So How Do You Buy GAP Insurance? 1.
Consider the type of cover you want to buy There are a number of options to choose from:
Compare GAP Insurance quotes Your car dealer may well try and sell you this insurance cover.
By all means buy it from him but do be careful and don't accept the first deal you are offered.
Car dealers are known to overcharge for these policies - in fact consumer advice programme, Rip Off Britain has even covered this topic.
You can buy GAP insurance online - there are a number of providers, including ALA Insurance and Click4GAP.
It is simple to do and providers offer very slick, easy to use websites to assist you in getting a quote, comparing policies and then, if appropriate, buying a policy to meet your needs.
3.
Cooling Off Period If, having bought your policy, you find you are unhappy with it, with most policies you are protected with a 14 day cooling off period.
The issue that arises as a result of this drop in value is that your car insurance provider will usually only pay the current market value of the car should you write it off.
This means there could be a 'gap' between the payment you receive and how much you still owe on a loan or how much you'll have to pay for an equivalent car.
GAP insurance can cover this shortfall - it can cover the gap between the payment you receive from your car insurance provider and the amount you need to pay off your outstanding finance or to buy a replacement car of equal standing.
So How Do You Buy GAP Insurance? 1.
Consider the type of cover you want to buy There are a number of options to choose from:
- Return to Invoice (RTI) which pays the difference between your car insurance claim settlement amount and the amount you paid for the car, the invoice amount for the car.
- Return to Value (RTV) which pays the difference between your car insurance claim settlement amount and the value of your car at the time you took out the policy.
- Finance or Lease GAP Insurance which pays the difference between your car insurance claim settlement amount and the amount outstanding on your loan or finance agreement.
- Replacement GAP Insurance which covers the cost of replacing your car with exactly the same make/model or equivalent as you originally bought.
Compare GAP Insurance quotes Your car dealer may well try and sell you this insurance cover.
By all means buy it from him but do be careful and don't accept the first deal you are offered.
Car dealers are known to overcharge for these policies - in fact consumer advice programme, Rip Off Britain has even covered this topic.
You can buy GAP insurance online - there are a number of providers, including ALA Insurance and Click4GAP.
It is simple to do and providers offer very slick, easy to use websites to assist you in getting a quote, comparing policies and then, if appropriate, buying a policy to meet your needs.
3.
Cooling Off Period If, having bought your policy, you find you are unhappy with it, with most policies you are protected with a 14 day cooling off period.