What does Vehicle Replacement GAP Insurance cover?
If your vehicle is stolen or damaged beyond repair, Vehicle Replacement GAP Insurance pays the difference between what your motor insurer pays you and either:
What it will cost to buy a replacement vehicle of the same age, mileage and spec or your outstanding finance agreement amount, whichever is greater.
How do Vehicle Finance GAP policies work?
You buy a vehicle
Let’s say you buy a brand new car from a dealership which cost £35,000.
Your vehicle is stolen
18 months later, your car was stolen and was never recovered.
Because you used your car for your daily work commute, your car accumulated high mileage during your 18 month ownership, therefore your motor insurer offers you a settlement of only £28,000 - £7,000 less that its original invoice price.
However, the make and model of your vehicle when bought new hasn’t lost a great deal of value and will cost £32,000 to replace on a like-for-like basis – only £3,000 less than its original ticket price of £35,000.
You're unable to replace the car like-for-like
This leaves you with a financial shortfall of £4000, meaning you may not be able to buy a replacement car of a similar spec to the one that was written off.
What’s more, it’s likely you’ll need to continue paying the loan repayments using other financial means....
Your GAP policy protects you
Your Vehicle Replacement policy will pay the difference between what your motor insurer pays (£28,000) and what it costs to replace it with a new vehicle on a like-for-like basis (£32,000) – which in this instance is £4,000.
Vehicle Replacement features and benefits
Pays up to £50,000
Provides up to 4 years GAP cover
Pays £250 towards your motor insurance excess
Covers vehicles up to £150,000 in value
Covers cars & vans
Available to individuals and businesses
Covers all drivers who are legally allowed to drive your vehicle
Covers manufacturer fitted extras
Vehicle Replacement policy restrictions
Vehicle must be deemed a ‘total loss’ by your motor insurer
Vehicle must be less than 12 months old
Vehicle must have covered less than 10,000 miles from date of registration
Vehicle must have been purchased within the last 90 days
You must have Comprehensive Motor Insurance in place
You must be 18 years old or over
You must be a UK resident
For details on all policy benefits and restrictions, please read our Vehicle Replacement policy wording before purchasing.
Should I buy a Vehicle Replacement policy?
A Vehicle Replacement GAP policy could be beneficial to you if:
Your vehicle is likely to drop in value between now and the end of your finance term
You wish to avoid paying finance repayments for a vehicle you no longer have
Your vehicle is likely to drop in value between now and the end of your finance term