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GAP insurance: what is Agreed Value GAP insurance?

27 October 2023

Written by Simon England

|  5 Minutes

There is an assumption that GAP (Guaranteed Asset Protection) insurance is only for new or nearly new vehicles; however, it can still be useful for vehicles which are a little older. Agreed Value policies are the only option available for cars which have been bought from a private seller. They are also perfect as a follow-on policy after the initial GAP cover has expired, or where the car has been owned for over a year and so doesn’t qualify for standard GAP cover.

In this guide, we will explain exactly what Agreed Value GAP insurance is and what it involves. We will also explain who Agreed Value policies can benefit, and the different limits and exclusions associated. We will explore whether Agreed Value GAP insurance is worth it, and how ALA can assist you.

What is Agreed Value GAP insurance, and what does it include?

Agreed Value GAP insurance policies will pay out the difference between the comprehensive car insurance company’s settlement and the Glass’s Guide retail value of the vehicle at the time it was purchased should the car be written off or stolen. Agreed Value is available for up to five years, and can be bought at any time after the car was purchased.

Agreed Value is a great choice as it has no time limitations, unlike policies such as Back to Invoice GAP insurance and Vehicle Replacement. No matter when you purchased your policy, the Glass’s Guide retail price of your vehicle will be considered, even if the car has depreciated, which it most likely will have.

Who can Agreed Value GAP insurance benefit?

An Agreed Value GAP insurance policy is best suited to vehicles bought from a private seller rather than a VAT-registered dealership. This policy also applies to cars purchased via a dealership that have missed out on the time limitations applied to Back to Invoice and Vehicle Replacement GAP insurance. So, if it has been more than 180 days after the delivery of your vehicle from a dealership (90 days for Vehicle Replacement), you will only be eligible for Agreed Value. However, if your vehicle is covered by your standard car insurance provider as “new for old,” you will be eligible for a Back to Invoice policy for up to 365 days.

All of our policies here at ALA are competitively priced and designed to ensure you are fully protected should your insured vehicle be declared a total loss. We also guarantee to match any GAP insurance quote found elsewhere. To find out more, you can start building your quote here with us today.

Is Agreed Value GAP insurance worth it?

The majority of drivers get a GAP insurance policy for a brand new or nearly new car to protect their investment should the vehicle be written off or stolen. This ensures that any depreciation the car has faced will be covered by their GAP insurance. However, this doesn’t mean that GAP insurance isn’t worth it for older cars.

All cars depreciate in value, and your car insurance provider will only pay you what the vehicle was worth at the time it was declared a total loss. If your car less than 10 years old, your Agreed Value GAP policy will provide you with the shortfall between the settlement provided by your motor insurer and the retail value of the car at the time it was purchased.

Agreed Value GAP insurance allows you to buy a similar car with the money you get back from your car and GAP insurer, making it easier to find a new vehicle after your old one is declared a total loss.

What are the limits and restrictions associated with Agreed Value GAP insurance?

Like all GAP insurance policies, Agreed Value comes with some limitations to be aware of. It is important to note that, although Agreed Value is available for older cars, the car must be younger than 10 years old to qualify. It must also have fewer than 100,000 miles on the clock, be worth less than £75,000, and it must not be classed as an excluded vehicle. Excluded vehicles include Ferrari, Lamborghini and Maserati, and those used for hire and reward. You should also make sure that the car you have bought from a private seller has not previously been declared a write-off, as this would invalidate the GAP policy. You can find out more in our policy wording here.

Other than these requirements, Agreed Value is unique in that it doesn’t have a time limit on when you can purchase the policy, so no matter how long it’s been since you bought your car, there’s still a policy available for you.

Agreed Value GAP insurance with ALA

Our Agreed Value policies at ALA Insurance will help you protect your investment and ensure vehicle depreciation does not prove to be an issue. Any amendments to your insurance policy can be made free of charge, and we also offer pro-rata policy transfer of unused premium if you decide to change your vehicle.

To find out more about how we can help you, do not hesitate to contact a member of our team today.

Common Queries

What sort of GAP insurance policy is best if I bought my car outright?

In this scenario, where the car was bought outright from a VAT registered garage drivers can choose between Vehicle Replacement Plus (within 90 days of collection) or Back to Invoice Plus (up to 180 days after collection). The former policy will cover the cost of a replacement vehicle, whereas the latter will take you back to how much you originally paid. If you miss out on these time frames, or you bought the car from a private seller, you can only purchase an Agreed Value policy.

Does GAP insurance pay the full amount?

GAP insurance works in conjunction with your comprehensive motor insurance policy and is designed to “top-up” their settlement if your car is written off. It can do this in a number of ways depending upon which policy is suitable for you. With Agreed Value GAP policy, you’re covered for the difference between the insurer’s market value settlement at the time of the write-off, and the Glass’s Guide retail value of your car at the time you bought your GAP policy.

What is the benefit of an Agreed Value policy?

Agreed Value policies will cover you should your vehicle be declared a total loss, and it can be bought at any point after you bought the car, so long as it is younger than 10 years old.