A full guide to GAP insurance costs

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GAP insurance can help you bridge the gap between how much you initially paid for your vehicle and what your motor insurance company currently values it at if it is completely written off or stolen. Cars depreciate quickly, and you don’t want to be out of pocket should the worst happen. GAP insurance can give you peace of mind, especially if your vehicle is new.

Many people considering GAP insurance wonder about how much it will cost them, and whether the price will be worth it alongside their existing comprehensive motor insurance. In this guide, we will explain the various different policies you can choose from, the differences in quotes and costs, and the various caps and risks that you need to be aware of.

What are the different GAP insurance policies to choose from?

When you opt for GAP insurance with ALA, there are four different policies to choose from:

  • Back to Invoice Plus: also known as Return to Invoice Plus, this policy pays the difference between your motor insurers market value settlement and the vehicle’s original invoice value or outstanding balance on your finance agreement, whichever is higher

  • Agreed Value: if your vehicle was bought privately, this policy will be recommended for you

  • Vehicle Replacement Plus: this policy will cover the motor insurer’s settlement figure and the replacement cost of an equivalent vehicle or outstanding finance, whichever is higher

  • Contract Hire Plus: this policy will settle up to 100% of your outstanding rental payments on a leased vehicle, and will cover any shortfall in the market value

To find out more about these policies, please visit us on our website.

Policy differences in GAP insurance quotes

How much a GAP insurance policy costs depends on several different factors, such as the type of policy, the vehicle being insured and who you take a policy out with. GAP insurance policies provided by car dealerships, more often than not, cost far more than they need to. At ALA, our policies are competitively priced , and you can receive a quote through our online calculator here.

For instance, if you took out a three-year policy on a vehicle with an on the road cash price of £19,000 and you wanted a Back to Invoice Plus policy , you would be looking at paying approximately £175. You will also need to provide your GAP insurance provider with a few details about your vehicle, such as its current mileage and whether you bought it from a dealer. These details affect the price of your policy.

You will always receive complete transparency from our experts at ALA, who can provide you with information about best policy to take out for your situation. You can read our full guide concerning policy differences and pricing here.

GAP insurance coverage caps and risks

There are often claim limits in place when you create a GAP insurance policy. If the claim limit set is too high, you could be charged more than necessary for your policy. If your claim limit is too small, then you might not get appropriate coverage should you need to make a claim. We believe that our customers shouldn’t have to worry about how much they need to claim back, covering them for every eventuality should their vehicle be stolen or written off.

Some GAP insurance companies will put caps in place in correlation with the Glass’s Guide retail prices. This could leave drivers with more expensive vehicles out of pocket should their vehicle be written off or stolen. At ALA, different policies cater to certain vehicles and their value:

  • Back to invoice plus policies apply to vehicles worth up to £150,000 in value, with benefit level options up to £50,000

  • Contract hire policies apply to vehicles on lease deals worth up to £125,000 in value, with benefit level options up to £50,000

  • Vehicle replacement insurance policies can support vehicles worth up to £150,000 , with benefit level options up to £50,000

  • Agreed value policies apply to vehicles bought privately. Benefit level options range up to £25,000

There are risks present with GAP insurance in that they sometimes won’t pay out in certain situations. If your motor insurer chooses not to pay out, for whatever reason, then your GAP insurer won’t pay out either. It’s rare, but there are other scenarios where your GAP insurer may not pay out, which is why you should read your agreement carefully before signing up.

GAP insurance also does not cover certain features, such as car payments if you enter financial hardship, repairs or the cost of a rental car whilst your current one is being repaired. We can help if you have any questions regarding your policy or the various GAP insurance options that appeal to you. Get in contact with us today for more information.

You can read our full guide concerning caps and risks here.

In conclusion

Like with most insurance policies, there are caps and risks involved, which is why you are always advised to read your policy and agreement thoroughly, as this may be a part of the small print. At ALA, we will always be completely transparent with you regarding your insurance policy with us.

You can find out more about our various GAP insurance options on our website here.