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Mercedes GAP insurance – avoid a financial shortfall

8 May 2024

Written by Simon England

|  5 Minutes

Mercedes Benz has gained a reputation for delivering high performance, comfort, style and reliability. In fact, the German manufacturer produced some of the most robust armoured vehicles and aeroplanes during World War Two.

This luxury car manufacturer is the tenth largest worldwide and remains the fourth most popular car brand in the UK. Mercedes sold 7,293 new passenger cars in 2023. The most popular model for drivers is the C Class – unfortunately, it’s also one of the most popular targets for thieves.

If your Mercedes is stolen or written off, you may have to cover a significant financial shortfall when replacing your car. Guaranteed Asset protection tops up your comprehensive car insurance settlement to help you get back on the road as soon as possible after a total loss.

Mecedes A class

Why get GAP insurance for your Mercedes?

Mercedes are some of the most popular vehicles in the UK. On the downside, they’re also targeted for theft – 28% higher than the national average. Moreover, almost all new luxury cars are bought on finance so if your luxury car is written off or stolen before you pay it off, you could have a considerable shortfall to cover before replacing your Mercedes.

Your comprehensive car insurance offers a market value settlement after a total loss, not the amount you originally paid. Due to depreciation, which is steep within the first three years, drivers usually cannot afford a replacement with only a market value settlement.

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If you write off your vehicle before you’ve settled your finance agreement and you’re in negative equity (you owe more than the current value of the car), you’ll be paying for a car you no longer own.

GAP insurance tops up your car insurance settlement so you can get back on the road in a new car sooner than you expected. The four types of GAP insurance cover you regardless of how you paid for your vehicle.

How does GAP insurance work?

Whether you bought your car outright, on finance, from a private seller or on lease there is a GAP insurance policy to cover your potential shortfall.

Back to Invoice GAP insurance tops up your car insurance settlement up to the original invoice price, or the outstanding finance balance if this is higher. Policies last up to four years and cover vehicles owned for less than 180 days, under ten years, £125,000, and bought from a VAT-registered dealer. If you have new-for-old coverage on your car insurance within the first 12 months, you have 365 days to buy a BTI policy.

Vehicle Replacement GAP insurance tops up your car insurance settlement up to the vehicle replacement cost or the outstanding finance balance if this is higher. Policies last up to four years and covers vehicles owned for less than 90 days, under seven years, £125,000 and bought from a VAT-registered dealer.

Contract Hire GAP insurance covers your insurance shortfall after a total loss, up to £3000 of your lease deposit, and outstanding car leasing payments. Policies last up to five years and can be taken out up to 365 days after collecting your contract hire car. Contract Hire GAP insurance covers vehicles up to £125,000, under ten years and bought from a VAT-registered dealer.

Agreed Value GAP insurance is available for cars bought from private sellers or if your vehicle exceeds the timeframe requirements for the other policies. It covers the depreciation from the day you purchase a policy.

Potential savings from Mercedes GAP insurance

The C-Class costs from £44,000 new from a Mercedes dealership and although the resale value is usually high (part of the reason they’re attractive to thieves), they still depreciate by up to 39% within the first five years.

If you write off a Mercedes with a purchase price of £44,130, you will only get a market value settlement from your car insurer. Suppose the vehicle depreciates to £40,000, you’ll have to cover the £4,130 shortfall. If you paid for your Mercedes on finance, your market value settlement might not cover your remaining loan balance. You’ll be left to cover the remaining loan and pay for a replacement vehicle.

How much could you save with Mercedes GAP insurance?

Average Mercedes GAP insurance cost

Average payout

Potential savings (from)




Is Mercedes GAP insurance worth it?

A total loss occurs every 90 seconds in the UK, and Mercedes was the third-most common claim we paid in 2023. For the affordable price, GAP insurance is a good idea to avoid a significant financial shortfall after a total loss.

Where to get Mercedes GAP insurance

Typically, drivers learn about GAP insurance from their car dealership and later discover online third-party GAP insurance providers offering a much cheaper price. In 2024, the FCA prohibited the sale of dealership GAP insurance due to the unfairly inflated costs.

Luckily our happy customers made the right decision in choosing a reputable provider in the first instance. We never inflate our GAP insurance prices and with a 99% payout rate, you get what you pay for.

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ALA Insurance always offers a fair and competitive Mercedes GAP insurance quote

  • We have a 99% payout rate

  • Over 17,000 customers rate us five stars

  • We’re expert-rated on Defaqto

  • We cover £250 excess as standard for all policies

  • No mileage limits on VR and AVG policies

  • Monthly payment option available (ten instalments)

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Frequently Asked Questions

How long do you have to take out GAP insurance for a new car?

You have up to a year to take out GAP insurance. BTI typically covers cars owned for less than 180 days, for VR it’s 90 days. Contract Hire covers cars collected within a year. Failing this, Agreed Value policies don’t come with a time limit.

Can you cancel, refund or transfer Mercedes GAP insurance?

If your circumstances change, you can easily cancel your GAP insurance coverage in our customer portal. You can cancel your policy within 30 days and receive a full refund, after this cooling-off period, you’ll get a pro-rata refund of any unused premium minus a £35 cancellation fee.

If you sell your car, you can transfer your GAP policy for no additional fee.

Which cars are eligible for Mercedes GAP insurance?

  • Cars and vans under £125,000

  • Cars and vans with comprehensive insurance

  • Cars and vans used for personal or commercial purposes (excludes hire & reward, courier or tuition)

How do you claim Mercedes GAP insurance?

If you’ve written off your car, contact your GAP insurance provider before accepting a settlement from your car insurer. Our claims process is quick and simple, make sure you have the required documentation before claiming.

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