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Should you get GAP insurance from your car dealership? Comparing ALA GAP coverage

7 December 2023

Written by Simon England

|  5 Minutes

Should the worst happen, and your vehicle is written off, you can use Guaranteed Asset Protection insurance to protect your investment. Comprehensive motor insurance will only pay the current market value of your car after a total loss, not the original amount you paid for your vehicle. Also, your car insurance payout may not cover your outstanding finance on your vehicle.

GAP insurance can be helpful for brand new cars that experience a sharp fall in value the day they leave the dealership. However, people don’t always realise GAP policy is still beneficial to cover used cars, particularly if they’re fast-depreciating models or if you have vehicle finance. This article discusses dealership GAP insurance, when it’s useful and the benefits of using independent providers for GAP coverage.

Do you have to buy GAP insurance from a dealer?

Did you first hear about total loss GAP insurance from a car dealer? Many people are encouraged to purchase additional products when buying a new or used car from a dealership. However, GAP insurance is available elsewhere. We recommend that you shop around for the best GAP insurance policy before buying the first option presented to you.

You can shop for GAP insurance well before purchasing a vehicle, this allows you to find the best deal without pressure from the dealership. With ALA Insurance brokers, you can even buy a GAP insurance policy in advance to start on the day you collect your car. If your collection date changes we’ll amend this free of charge for stress-free driving from day one.

Is buying GAP insurance from a dealer or an independent provider better?

Buying a GAP insurance policy from an independent provider is almost always more cost-effective. Finding an alternative provider can save you up to 75% on GAP insurance. However, some customers might find it convenient to use the same provider for vehicle finance and GAP insurance – even if it’s more costly. It takes less than ten minutes to buy GAP insurance online or with one of our friendly team and you could save hundreds of pounds in doing so.

Build your ALA GAP Insurance quote

Because customers often learn about GAP insurance for the first time from their car dealership, they may not spot an unfavourable deal straight away. Whilst you’re nort obliged to buy GAP insurance, the dealership is not your only option; they have to allow you time to think about your decision and get the best deal.

Which GAP insurance is best?

Comparing ALA GAP insurance and dealership GAP insurance, ALA offers benefits including great value, top rated by Trustpilot, Excellent customer service, flexible coverage, convenient payments and high insurance payout rates.

Why is dealership GAP insurance so expensive?

Dealership GAP insurance usually offers similar protection to independent providers, so it can be difficult to explain the added cost. Dealerships can often get away with hiking their prices because they hope customers new to this type of coverage won’t do their research or shop around for the best deal. It’s not uncommon that customers agree to dealership GAP cover when it’s presented as a small additional monthly cost compared to the finance repayments.

Don’t get caught in the GAP trap

Shop for the best GAP insurance deal online

In fact, independent providers can offer you so much more for a fraction of the price. ALA Insurance provides four different GAP policies: Back to Invoice Plus, Vehicle Replacement Plus, Contract Hire GAP (only available for lease cars) and Agreed Value GAP. We contribute £250 to your car insurance excess as standard, and you can opt for Keycare, Tyre and Alloy Wheel Insurance, Scratch and Dent Insurance or Excess Protection as policy add-ons.

Why do you have to wait to buy dealership GAP insurance?

The Financial Conduct Authority introduced regulations for vehicle dealerships selling GAP insurance to prevent them from misinforming their customers. When GAP insurance was new, there was little competition between providers. Therefore, it was easy for dealerships to sell overpriced GAP insurance policies, conceal the costs within other products, pressure sell and mislead customers about what GAP insurance covers.

The latest (2015) rules make dealerships wait two clear days between mentioning/quoting GAP insurance to a customer and concluding the sale. This day gives the customer time to read the information provided and shop around. This also reduces pressure on the customer to make a decision straight away.

Dealerships must also:

  • Inform customers about independent GAP insurance providers
  • Provide relevant information to educate the consumer about GAP cover
  • Provide a clear cost breakdown of GAP insurance coverage separate from any other costs

Related article: When to buy GAP insurance for dealer-bought cars

Why choose an independent GAP insurance provider

Car dealerships have been known to pressure sell and even mislead their customers to secure an upsell. However, the latest rules make it easier for you to find the best GAP insurance deal. On the other hand, independent providers, more heavily regulated by market forces, are much more likely to offer a fair price for GAP cover.

For example, the average ALA policy costs as little as a standard gym membership per month. You can pay it in one lump sum or split the payments over ten months (paid over direct debit) and the policy will last for up to five years. You can buy a GAP insurance policy for various vehicle types, including new and used cars, commercial vehicles, vans and motorhomes.

Buying GAP insurance online is simple – enter your vehicle details in our quote calculator and see how much your policy could cost in seconds. There’s no need to visit a dealership or even ring your finance or car insurance company. Moreover, you’ll save up to 75% with an independent GAP insurance provider. ALA Insurance is rated the number one Insurance Company on Trustpilot, so you won’t need to shop for long.

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What to read next

GAP insurance explained: Is it worth it for my vehicle?

GAP insurance coverage: everything you need to know

Is GAP insurance worth it for pre-registered cars?

Policy differences in GAP insurance quotes

When to buy GAP insurance on dealer-bought cars?