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Tesla GAP insurance – cover the total loss shortfall

9 May 2024

Written by Ignition

|  5 Minutes

For the past five years, Teslas have maintained the top spot for the UK’s favourite electric vehicle. They sold over 35,000 new Y Models in the UK during 2022. Tesla is also slowly becoming one of the biggest and most popular car manufacturers in the UK and worldwide.

These modern motors deliver exceptional performance and a luxury driving experience; the newest models are packed with advanced technological features. Autopilot, Sentry Mode, Dog Mode, Over-The-Air programming and supercharging are some of the most innovative tech advancements in motoring.

Electric vehicles are usually 50-100% more expensive than their gas-burning equivalents. Although the investment can pay off in the long run, buying an EV on finance is usually preferable.

Tesla’s advanced, luxury features and high price tag mean buyers tend to be more affluent. A result, these cars are targeted for theft. Teslas are the second-most stolen EV and the most common EV targeted for theft from inside the vehicle.

Why get Tesla GAP insurance?

These modern electric cars have innovative features to protect you and your vehicle. Every brand-new car includes Autopilot, Sentry Mode and multi-level security features. Intrusion-sensing hardware and PIN to drive help prevent theft.

Autopilot uses special sensors to keep you safe on motorways. It reduces accidents by a staggering 40%. With Sentry Mode, drivers can watch their parked cars from anywhere and receive alerts about suspicious activity.

Nevertheless, Teslas are still attractive to thieves. If your Teslas is stolen or written off, you will get a market value settlement from your motor insurance provider. You’ll have to cover the shortfall if you want to replace the car. Additionally, suppose you paid for your Tesla on finance and you write it off before settling your finance loan. You could end up paying for a car you no longer own.

Image of a tesla at sunset

How does Tesla GAP insurance work?

GAP insurance tops up your motor insurance claim to cover the financial shortfall after a total loss. If your car depreciates, you still owe a considerable amount on finance, or you bought it on a Contract Hire agreement, you’ll have a significant amount to cover before getting back on the road. Four types of GAP insurance can cover your Tesla, regardless of how you paid for it.

Return to invoice GAP insurance covers the difference between your motor insurance payout and the car’s invoice price (or the outstanding loan balance if this is higher). This policy protects your initial investment if you write off a Tesla.

RTI, also called Back to Invoice (BTI), covers dealership-bought cars worth less than £125,000. Cars less than ten years old and delivered within 180 days are eligible. These policies last up to four years. Learn more about Back to Invoice GAP insurance.

Vehicle Replacement GAP offers similar cover but ensures you can afford a replacement (new-for-old) Tesla. With the price of new and used EVs increasing, this policy is useful to ensure you can buy a replacement – even if the replacement cost is higher than the invoice price.

This policy lasts up to 4 years and also covers your outstanding finance if this is higher than the replacement cost. Vehicle Replacement policies are limited to cars under 7 years, worth under £125,000 and with less than £80,000 miles. You have 90 days from receiving the car to take out a VR policy.

Contract Hire GAP insurance covers the financial shortfalls associated with writing off a Leased Tesla. Leasing is a common payment option for expensive cars but you could be left with a significant amount to cover after a total loss. CHG covers your insurance claim shortfall and any outstanding lease payments, we also cover up to £3000 of your deposit to help you get back on the road. Contract Hire policies last up to five years and cover cars worth less than £125,000. You have 365 days from collection to take out a Contract Hire GAP policy. Learn more about Contract Hire GAP insurance.

If you’ve missed the deadlines for Back to Invoice or Vehicle Replacement, or you bought your Tesla from a private seller, you could still be eligible for Agreed Value GAP insurance.

How much is Tesla GAP insurance?

The average GAP insurance for Tesla costs £244 but this takes into account all policy lengths and types. The most common policy length (50%) is four years with only 10% buying policies less than 3 years.

Average Tesla GAP policy


Potential savings from GAP insurance

The average new Tesla costs between £93,000 and £113,000 (some models cost as little as £39,000). Depreciation of Teslas after four years is around 20%, which is fortunately lower than the average.

Suppose your Tesla, bought for £100,000, was declared a total loss after four years, your market value settlement could be as low as £80,000. You’ll have to cover the £20,000 shortfall in your initial investment. You may even have finance to pay off, leaving even less remaining for a replacement.

If you had a GAP insurance policy in place, you’d be covered for the remaining finance and depreciation gaps – or other shortfalls if you leased your vehicle. GAP insurance for Tesla pays out £18,909 on average, yet the average insurance costs from £244. Your savings after a total loss could be significant.

Average GAP insurance cost (4-year average policy)

Average Tesla payout

Potential savings




Is Tesla GAP insurance worth it?

Considering the potentially large shortfall you could incur after writing off a Tesla, GAP insurance is the smart option for EV enthusiasts. The affordable price, makes it a no-brainer if you want to ensure a replacement vehicle is affordable after a total loss or that you aren’t paying for a car you no longer own.

Trust pilot review

Drivers used to be able to buy GAP insurance directly from Tesla dealerships, it was offered as an optional insurance cover for a brand-new car or pre-loved vehicle. However, the prices of GAP cover were so unfairly high from dealerships that the FCA prohibited its sale there.

Instead, choose a trusted GAP insurance provider. We’ll never inflate the price. A price match guarantees the best value from ALA. Over 17,000 customers rate us five stars on Trustpilot. We’re also rated best in the ‘insurance company’ category. Our customer service is “first-rate” – you’ll always be able to talk to a friendly member of our team.

Trust pilot review

Frequently Asked Questions

What’s the difference between Tesla GAP insurance and an extended warranty?

Both are optional insurance products, but they cover very different things. GAP insurance tops up your insurance settlement after a total loss, meanwhile, an extended warranty covers the repair costs after an unexpected vehicle malfunction.

Which is the best policy for a Tesla on lease?

The only policy leased vehicles are eligible for is Contract Hire GAP insurance

How does Tesla GAP insurance differ from comprehensive insurance?

GAP insurance only tops up your car insurance settlement after a total loss. Comprehensive car insurance covers various things including vehicle repairs after accidental damage or the market value if the car is stolen/written off. You need comprehensive car insurance to take out GAP insurance.

What are the eligibility requirements for Tesla GAP insurance?

  • Valid comprehensive insurance in place for the vehicle and driver

  • Cars bought for less than £125,000

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

Read about policy-specific requirements

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