What is GAP insurance?

And why might you need it?


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If your car is written off, Direct Gap insurance will pay the difference between your insurer's payment and the cost of a new car. Although that's the basic concept, there are different types of gap insurance - depending on the policy details you can cover the cost of a new car, your finance settlement or the invoice price.

Why is it important?

If you have bought a car on contract hire or other finance, you need to ensure that you can repay the loan even if your car is damaged in an accident and written off. Although your motor insurer will offer you the value of the car in the event of total loss, there's no guarantee that this will be enough to meet your obligations under your finance agreement.

Gap insurance guarantees that you will be able to cover the difference. If you've bought your car with cash, it will ensure you recover at least the amount you originally paid for the vehicle.

Gap insurance can also ensure that you can replace your car fully if it's written off. Whilst your motor insurer will offer you a payment that covers its value at the point of loss, GAP insurance will make up the difference so that you can buy a car that matches the original specification (and covers optional extras too!).

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Free Gap insurance

We offer a free two week gap insurance policy for complete peace of mind when buying a new (or new to you) car.

The policy covers up to £5,000, the difference between the purchase price and motor insurer’s settlement in the event of a total loss. You can cover new and used cars and vans within 30 days of purchase - this includes all factory fitted optional extras.


By Beate Kubitz at 8 Dec 2014, 00:00 AM