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GAP Car Insurance

GAP actually is an acronym for Guaranteed Asset Protection gap insurance is a type of insurance which actually does what it says - guarantees to protect your asset - your car or commercial truck or van. ALA insurance are specialists in the provision of various types of gap car insurances: new car gap insurance, used car gap insurance and commercial truck and van gap insurance - particularly back to invoice car gap insurance (sometimes called return to invoice car gap insurance), vehicle replacement car gap insurance, contract hire car gap insurance, finance car gap insurance and commercial truck and van gap insurance. Our aim is to ensure that you are able to purchase the right car gap insurance or commercial truck and van gap insurance policy for your needs at a competitive price.

Many people do not realise that once they have taken delivery of their new car it immediately becomes "second hand" and their insurance policy will treat it as just that. Every vehicle suffers depreciation in its value over its life - some more than others, unfortunately. Comprehensive motor insurance policy settlements are made on the depreciated value of the vehicle - which often bears no relation to the actual price paid. In the event of the vehicle being written off or stolen the fully comprehensive motor policy will not usually pay out the full purchase price of the vehicle, leaving you with a shortfall, or gap, between your insurance settlement and your outstanding finance charges.

New car gap insurance, used car gap insurance and commercial truck and van gap insurance and offer protection and coverage if your vehicle is stolen (unrecovered) or written off by your insurance company after an accident. Car gap insurance or commercial truck and van gap insurance cover is in addition to your comprehensive motor insurance policy and covers the difference between the original purchase price of your vehicle and the payment that you receive from your insurer. You could be left with outstanding finance, or have a debt balance on the vehicle if you are in a contract hire or lease agreement if the motor insurance settlement does not cover the outstanding balance on your finance agreement or contract. Car gap insurance (covering both new car gap insurance and used car gap insurance) will cover you for the shortfall - the difference in the amount that your insurer pays and the outstanding balance that you are liable for. Your motor insurance policy will only pay out on the market value of the car - leaving you out of pocket - and a gap insurance policy will make up the difference. The same also applies to commercial truck and van gap insurance.

With the rapid depreciation in car values if your car is written off or stolen you could find that you have lost a great deal of money. Our various types of new car gap insurance and used car gap insurance - back to invoice gap insurance, (sometimes known as return to invoice gap insurance), vehicle replacement gap insurance, contract hire gap insurance, finance gap insurance and commercial truck and van gap insurance will ensure that you do not suffer financial loss when your car is written off or stolen. You would not relish being in the position of paying off a loan or contract charges for a car which you no longer own - by taking out a gap insurance policy from ALA this will ensure that this does not happen to you. Our gap insurance policies are an insurance policy covering the difference on your outstanding finance on the car and your insurer's depreciated payout for it.

Whether you are unfortunate enough to lose your vehicle in a motor accident or if it is stolen your comprehensive motor insurance will still only cover the book value (the depreciated value) of your vehicle, leaving you with the possibility of having outstanding finance charges owing and also of not having a vehicle. Gap insurance will cover this for you, your comprehensive motor insurance policy will not. A gap insurance policy is available to suit each type of finance - or even where there is no finance (when you have purchased the vehicle outright) - on your vehicle. If you own your vehicle we have new car gap insurance and used car gap insurance policies which will be suitable, particularly back to invoice car gap insurance (return to invoice car gap insurance) or vehicle replacement car gap insurance, and of course commercial truck and van gap insurance.

By purchasing gap insurance through ALA you will be purchasing added protection for you, and your car, if you suffer a total loss. Our gap insurance policies cover you where your motor insurance policy does not. Gap insurance ensures that there is not a gap in your finances between your insurance company's payout (which will be the depreciated value, not the price which you paid for the vehicle) and the amount that you either owe on finance, or in contract charges - the policy will provide funds to take you back to the invoice price (a back to invoice car gap insurance/return to invoice car gap insurance) or actually replace a like-for-like vehicle (vehicle replacement car gap insurance)

If you have a car on finance or contract hire - including both personal and business finance agreements then you will still be able to cover your vehicle with a car gap insurance policy and for a more detailed explanation please look under each separate product heading: Finance Gap Insurance, Contract Hire Gap Insurance, Back to Invoice Gap insurance, Vehicle Replacement Gap Insurance and Commercial Vehicle Gap Insurance.

Briefly, Finance Gap Insurance provides gap insurance cover for your vehicle if it is written off or stolen if you have the vehicle on hire purchase, lease purchase or personal contract purchase. Contract Hire Gap Insurance provides gap insurance cover for your vehicle if it is written off or stolen if you have the vehicle on business contract hire, personal contract hire, lease hire or finance lease. Back to Invoice Gap Insurance (also known as Return to Invoice Gap Insurance) provides gap insurance cover you if your vehicle if it is written off or stolen if you have the vehicle through a hire purchase agreement, a lease purchase agreement, on personal contract purchase, private (ie bank) loan or you have purchased the vehicle outright. Finally, a Vehicle Replacement Gap Insurance policy will provide gap insurance cover if you have financed your vehicle yourself as an outright purchase, or if you have the vehicle on hire purchase, lease purchase or personal contract purchase.

GAP insurance for new and used cars:

New car gap insurance and used car gap insurance is sometimes known as back to invoice car gap insurance (BTI), return to invoice car gap insurance (RTI) vehicle replacement car gap insurance, shortfall cover car gap insurance, total loss car gap insurance or some times just plain car gap insurance. Whatever you call it GAP insurance is "Guaranteed Asset Protection" insurance - and it does just that, it protects your asset and your investment in that asset against a shortfall (or gap) between the payout that your comprehensive motor insurance policy gives you in the event of a total loss and the price you paid for the vehicle (even if it is on finance) or the finance charges if the car is on contract hire. So, if you are unfortunate enough to have your vehicle stolen, accident damaged or written off in some other way a new car gap insurance or used car gap insurance policy will cover you and will pay the difference between your original purchase price and the following:

  • The amount you would owe to the finance company in settlement.
  • The amount owing to the lease or contract hire company for the balance of the agreement.
  • The market value of the car immediately prior to the loss (this is known as the motor insurer's depreciated value).

By taking a new car gap insurance policy, or a used car gap insurance policy you will be protected if your vehicle is stolen or involved in a write-off situation where your motor insurance company's pay out is less than the actual amount still owing on the vehicle, or the amount paid originally.

Look at the example below - which is for a car financed by a loan or on a contract hire agreement:

Original cost of your car£20,000
Deposit paid£2,000
Loan Amount:£18,000
A year later the car is stolen or written off:
Amount still owing to the finance company£12,000
Your insurer's depreciated value payout£9,000
The shortfall - or GAP £3,000

Your new car gap policy or used car gap policy will pay the amount still owing on finance or to the contract hire company if the car is on contract.