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When to buy GAP insurance for used cars

GAP (Guaranteed Asset Protection) insurance is a popular choice amongst drivers of brand-new cars, as they can protect their finances should their vehicle be stolen or written off further down the line. Although new car drivers commonly use it, it is still a great choice for used cars, especially if you take out a finance deal.

In this guide, we will explain whether GAP insurance is worth it for used cars, when the best time to purchase GAP insurance is, and the various exclusions that you need to be aware of.

Is GAP insurance worth it for used cars?

All GAP insurance policies are available for used cars. Although it isn’t very common, you can lease a used car and Contract Hire Plus may still be available for your vehicle. Back to Invoice Plus (also known as Return to Invoice Plus) is also available for used cars, as long as it is less than ten years old. If your used car is less than seven years old, you may qualify for Vehicle Replacement Plus. Agreed Value is perfect for used cars that have been bought from private sellers, and are less than 10 years old.

Used cars are currently in high demand, so taking out a GAP insurance policy is a great idea to lock in the high values. No matter the current value of your vehicle, all cars depreciate. Taking out a GAP insurance policy can save you the difference between the purchase price of your vehicle and the amount your car insurer will pay out should your car be stolen or written off.

You can find out more about our policies for used cars on our website.

When is the best time to get GAP insurance?

For a used car, there’s no time like the present to get a GAP insurance policy. As previously mentioned, used cars are in demand right now, which gives dealerships the incentive to raise their prices. In general, when you first purchase your vehicle, or you take out a lease or finance plan, you should consider GAP insurance straight away.

GAP insurance policies have caps on how long you are permitted to wait before you sign up. For Return to Invoice Plus policies, you have 180 days from the day you purchased your car to choose a GAP coverage quote. If your car is on finance, you have 90 days from the day you picked up your car from a VAT-registered dealer on Vehicle Replacement Plus policies. Vehicle Replacement Plus is also available for cars owned outright. Contract Hire Plus policies have more leeway, with a 365-day window. If you bought your car privately, there is no time limit on Agreed Value policies, but it would need to be less than 10 years old, and have completed less than 100,000 miles.

How long do I pay for GAP insurance on my used car?

It is recommended that you take out a GAP insurance policy for as long as you’re planning to keep your used car, or for as long as your car finance or leasing contract lasts. This is because the policies cannot be extended or renewed.

Here at ALA, our Back to Invoice Plus and Vehicle Replacement Plus policies can be purchased for a maximum of four years. Contract Hire and Agreed Value policies can be taken out for a maximum of five years.

However, we understand how difficult it can be to predict how long you will need GAP insurance coverage for your used car. Therefore, we can provide a daily pro-rata credit of the original premium if you sell or change your car before the policy runs out.
You can find out more on our FAQs page here.

If you would like to discuss your options, or you would like to receive a quote,
you can get in contact with our helpful team today.

Are there any GAP insurance exclusions?

When it comes to used cars, the main exclusion is their age. If your used car is older than seven or ten years, depending on the terms of the policy, you may not qualify for GAP insurance. Also, GAP insurance may not be as useful for your used car as opposed to a new one. This is because cars depreciate rapidly, especially in the first three years of ownership. This means that your car will have already lost a lot of its original value at the point you’ve purchased it. However, the car will continue to drop in value and so GAP insurance can still make sure you’re not out of pocket if your used car is written off.

You also need to make sure that you have fully comprehensive car insurance, as GAP insurance will not be valid if your car insurance is anything else. Also, if your car insurance provider refuses to settle for whatever reason, then your GAP insurance policy won’t pay either.

All policies also have caps on the value of your vehicle. For instance, Back to Invoice Plus will only be available to vehicles worth less than £150,000. GAP insurance is also not available for any vehicles used for hire and reward, such as taxis or couriers. Also, the vehicle cannot have been declared any category of write off prior to the policy being purchased.

GAP insurance policies with ALA

Here at ALA we have a number of policies available to suit your circumstances and cover your used car in case it is stolen or written off; protect what you originally paid for the car or the amount it would cost to replace, or it’s current value if you have owned the car for a while or bought it privately.
You can use our GAP insurance quote calculator to determine how much you could pay to protect your vehicle from total loss.

If you would like to find out more, do not hesitate to get in contact with us today.

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