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2019+ BMW 3 AND 4-SERIES FORUMS (G2x Generation) Local Forums UK GAP Insurance

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      02-24-2021, 07:00 AM   #1
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GAP Insurance

I've never had a GAP policy before so apologies if this is a dumb question...

If I take out a RTI policy for 3 years and write the car off 1 day before the end of that policy, my car insurance company will pay me market value for my car (say 20k), and the GAP insurer will top that up to invoice value (which say was 45k), paying out an additional £25k? Even if outstanding finance is much less?

And if thats the case, then I'm surely best to extend the GAP insurance term for as long as the PCP finance is? In my case, 4 years.

I think difference between 3 and 4 years was about £80, and if I was to lose car towards end of 4 years, they'd pay out RTI value (minus car insurance payment) to allow me to get something new again? (once remaining finance cleared etc)

Seems too good to be true.
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      02-24-2021, 08:12 AM   #2
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Quote:
Originally Posted by willougs View Post
I've never had a GAP policy before so apologies if this is a dumb question...

If I take out a RTI policy for 3 years and write the car off 1 day before the end of that policy, my car insurance company will pay me market value for my car (say 20k), and the GAP insurer will top that up to invoice value (which say was 45k), paying out an additional £25k? Even if outstanding finance is much less?

And if thats the case, then I'm surely best to extend the GAP insurance term for as long as the PCP finance is? In my case, 4 years.

I think difference between 3 and 4 years was about £80, and if I was to lose car towards end of 4 years, they'd pay out RTI value (minus car insurance payment) to allow me to get something new again? (once remaining finance cleared etc)

Seems too good to be true.
I believe your understanding to be correct, unless things have changed since my last policy which was back in the early 2000's 👴🏻?

Thieving bastards took our S4 cabriolet, but helped pay for some house improvements after getting back the full invoice value and buying a slightly less expensive replacement vehicle.

It's a no brainer on private purchases of any significant value.
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      02-24-2021, 05:01 PM   #3
isleaiw1
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You say its sounds too good to be true but insurance companies make a profit from it otherwise they would not be keen to sell it. This must be because a lot of people pay the £300 or so premium and very few need to claim on it.

Your car insurance company should put you back in the position that you were in so they should pay out enough to buy the car that you had (not the resale value) so you could argue that you are paying £300 and hoping your car gets written off or stolen.
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      02-25-2021, 12:51 AM   #4
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The main concern for me I think is if something was to happen to the car just after the first year.
My insurance company pay out replacement new car value for first 12 months, but after that the settlement figure (market value) could be well below the outstanding finance, until maybe sometime into year 3. So, if it was written off I may have just enough to pay finance off and walk away with nothing.
Whereas with GAP I would essentially get all my previous months PCP payments back and in a position to start again with a brand new car.

So, question really was, I could probably be in positive equity in around year 3 (where cars value was more than outstanding finance) and not require GAP to cover the finance, but why wouldn't you just extend that policy for as long as possible and protect your monthly PCP payments for entire term.

Then, if something happened to the car between years 3 and 4 I'd get all my money back and start again with a brand new car, instead of market value from car insurance company and therefore just enough to get me back into a 3+ year old replacement.

Most articles I've read say once the car is worth more than outstanding finance then GAP is not required, which technically is true. However, for the sake of an extra £80 to extend to 4 years its covering me for 36+ months of PCP payments.
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      02-25-2021, 01:48 AM   #5
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Worth doing on a PCP. With PCH / Lease GAP insurance will just cover the outstanding finance - if any - once your main insurance has paid out. This means that in a total loss you won't be left to pay remaining amounts on a car which is gone but you won't get the "invoice" value because you didn't really pay the invoice. On the flipside, it's usually cheaper. For example, over 4 years my GAP cover is £153. In the event of a total loss they will liaise with the insurers and between them settle the finance. I will get £2000 back as a deposit contribution. As I have 48 installments this works out at about £3 a month so it's a no-brainer to know I'd never get stuck with finance if there is a total loss.

Touch wood though, I've never had a loss.
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      02-25-2021, 04:53 AM   #6
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Quote:
Originally Posted by willougs View Post
I've never had a GAP policy before so apologies if this is a dumb question...

If I take out a RTI policy for 3 years and write the car off 1 day before the end of that policy, my car insurance company will pay me market value for my car (say 20k), and the GAP insurer will top that up to invoice value (which say was 45k), paying out an additional £25k? Even if outstanding finance is much less?

And if thats the case, then I'm surely best to extend the GAP insurance term for as long as the PCP finance is? In my case, 4 years.

I think difference between 3 and 4 years was about £80, and if I was to lose car towards end of 4 years, they'd pay out RTI value (minus car insurance payment) to allow me to get something new again? (once remaining finance cleared etc)

Seems too good to be true.
This is exactly how RTI / Invoice GAP insurance works with a financed car.

Car is written off... motor insurance pays out market value at the time of claim... GAP insurance tops this up to the original invoice price... You use that original invoice value to clear whatever amount (if any) is left owing to the finance company at the time of claim and then any money you have left over you put towards the cost of your next car.

The earlier that happens, the more you owe the finance company so the less you have going forward to your next car. But the later it happens, the less you owe the finance company so the more you have going forward to your next car.

Without GAP insurance, with your car being written off, you have your motor insurance payout only which, whilst it *could* be enough to clear the outstanding finance in its own right - particularly in later years - having to use some of that amount to clear outstanding finance reduces the amount of money you have to put forward to your next car without having to dip in to your own funds/savings etc.

GAP insurance is a "no brainer" but absolutely avoid buying it from a dealer where you'll pay considerably over the odds for it.
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      02-25-2021, 05:33 AM   #7
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Goto ALA GAP and use code MSE25 for a great price. I am getting mine today. My dealer couldn't come anywhere close.
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      02-25-2021, 05:45 AM   #8
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Quote:
Originally Posted by danorman777 View Post
Goto ALA GAP and use code MSE25 for a great price. I am getting mine today. My dealer couldn't come anywhere close.
Useful code - changed mine from £202 to £163 but Total Loss Gap will do it for £153. For the sake of a tenner I'll probably use ALA as they have a good reputation.
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      02-25-2021, 07:02 AM   #9
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Thing I liked about totallossgap was the RTI and RVI combined policy. Basically covered you for whichever was more, so saved me having to make a decision!

Tempted with the ALA quote though as a little less, and pretty sure RTI would be more than sufficient.
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      02-25-2021, 07:19 AM   #10
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For me ALA were cheaper than totallossgap? And as I have used them about a dozen times I stuck with them. 4 years on a new BMW 128ti was £40 more on Totallossgap with the code.
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      02-25-2021, 09:46 AM   #11
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Quote:
Originally Posted by InvadeLoyd View Post
GAP insurance is a "no brainer" but absolutely avoid buying it from a dealer where you'll pay considerably over the odds for it.
Its really not. Its c £350 to £400 for my car (list price £75k, I paid £65k in round numbers). I put in a healthy deposit, so even now at 4 months old, according to WBAC its not in negative equity. I've never had a total loss via theft or write off. If was stolen tonight I would be pushing insurers for the price to buy an equivalent car - which is well in excess of what i owe on it whilst not quite giving me all of my deposit back. If it was stolen after 3 years, I'd do very well in getting my payments for three years back.

But if its not a total loss in the 3 years I have wasted £350. And I havent had a total loss yet.

You may say its worth it to avoid having to put in the money if the worst happens. To me, I'm happy to take that risk. I'll spend the money having it ceramic coated instead to ensure it stays looking nice - that I will get value from, guaranteed.

Horses for courses but definitely not a no brainer for everyone.
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      02-25-2021, 10:11 AM   #12
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Totally agree, it’s down to attitude to risk. I’ve never had a loss either and if it was £350-£400 I’d take the risk too. In my case it’s £153 so I’ll get it but it’s horses for courses.
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      02-25-2021, 10:30 AM   #13
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Agreed.

However, personally, I'm not very good with risk. For the sake of what effectively works out as £6 a month (a couple of costa coffees), I like the security of knowing that if my car is total loss in the next 4 years, for whatever reason, I'll be back in a brand new car or clear of finance and in a position to replace it with a hefty deposit.
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      02-25-2021, 10:59 AM   #14
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Agree with that too.
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      02-25-2021, 11:42 AM   #15
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Mine was £267 so over 4 years not a lot for a good chunk of insurance. All insurance is like that I guess!!! Like you I have never needed it, but the one time you do it is priceless.

Having had negative equity in a few cars where the finance company has taken the hit I am happy to protect myself.
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      02-25-2021, 04:53 PM   #16
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Quote:
Originally Posted by danorman777 View Post
Goto ALA GAP and use code MSE25 for a great price. I am getting mine today. My dealer couldn't come anywhere close.
My dealer quoted me over £1000 for 3 year GAP. Spending £52k with them, you’d have thought they would do me a good deal....
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      02-26-2021, 08:57 AM   #17
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Quote:
Originally Posted by willougs View Post
Agreed.

However, personally, I'm not very good with risk. For the sake of what effectively works out as £6 a month (a couple of costa coffees), I like the security of knowing that if my car is total loss in the next 4 years, for whatever reason, I'll be back in a brand new car or clear of finance and in a position to replace it with a hefty deposit.
I dont buy expensive coffees either, tight git that I am!

Funny that I avoid small sums like that but will trade a car on a whim ad blow thousands!
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      02-27-2021, 01:45 AM   #18
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Quote:
Originally Posted by isleaiw1 View Post
Its really not. Its c £350 to £400 for my car (list price £75k, I paid £65k in round numbers). I put in a healthy deposit, so even now at 4 months old, according to WBAC its not in negative equity. I've never had a total loss via theft or write off. If was stolen tonight I would be pushing insurers for the price to buy an equivalent car - which is well in excess of what i owe on it whilst not quite giving me all of my deposit back. If it was stolen after 3 years, I'd do very well in getting my payments for three years back.

But if its not a total loss in the 3 years I have wasted £350. And I havent had a total loss yet.

You may say its worth it to avoid having to put in the money if the worst happens. To me, I'm happy to take that risk. I'll spend the money having it ceramic coated instead to ensure it stays looking nice - that I will get value from, guaranteed.

Horses for courses but definitely not a no brainer for everyone.
I put in a significant deposit with my car, but I don’t see it the same way as you. If the car was written off, I may not be negative on the finance but I’ve also lost that deposit and will have little left to fund a new / replacement car. For a few hundred pounds, it’s a no-brainier for me too.

18 months ago, a friends AMG C63 was written off as the engine got flooded. Less than 3 years old and it was written off as it needed a new engine. After paying off the finance, he had £30k left over! Without the RTI, he would have owed £2k.
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      02-27-2021, 02:06 AM   #19
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That’s a good example. It’s more of a dilemma when leasing, as I am, because the GAP will just ensure outstanding finance is covered along with returning the initial payment (£1245 in my case) but there’s no way of getting a positive amount like that.
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      02-27-2021, 03:46 AM   #20
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I paid for my new G21 in cash. After splashing out £50k it was a bit of a no-brainer to pay a couple of hundred quid to know that I'd get the full amount back if the car is written off in the next five years.
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