GAP or Guaranteed Asset Protection insurance is a great way to give yourself total peace of mind and protect your new car. In the unfortunate circumstance of suffering a total loss, a successful GAP policy claim will provide additional funds alongside the money you receive from your comprehensive insurer to help avoid financial losses due to depreciation.
As most vehicle’s (particularly new ones) are expected to depreciate heavily, a GAP insurance policy is an excellent investment to ensure you’re not out of pocket if the car is a total loss. There are different types of GAP insurance and whilst they might have different names, they are generally Vehicle Replacement Plus, Contract Hire Plus, Agreed Value or Back to Invoice Plus (also called RTI GAP insurance).
This article will look specifically at the most popular type of GAP insurance, RTI GAP or Back to Invoice Plus, what it covers, the requirements for this policy, and its limitations.
Back to Invoice is also called Return to Invoice (RTI GAP) insurance. In the event of a total loss, you can claim on comprehensive motor insurance and if the claim is approved, your car insurer will pay you a market value settlement. Then, claim on your BTI GAP insurance policy and receive the difference between the motor insurance company settlement figure and the original invoice price for the vehicle.
If, at the time of the total loss, your outstanding finance is higher than the invoice price of your vehicle, Back to Invoice (or RTI GAP) will pay the difference between your motor insurance settlement and the amount owed on vehicle finance.
What does Back to Invoice GAP insurance cover?
As with any insurance policy, there are a few criteria for taking out a Back to Invoice GAP policy and making a claim.
A Back to Invoice policy can be taken out on cars worth up to £150,000. The vehicle must be less than ten years old. You must have purchased it from a VAT-registered dealer either outright or using a finance provider.
RTI GAP Insurance (Back to Invoice) can be purchased for vehicles owned for 180 days or less. This can be extended to 365 days if your car is brand new and your motor insurance company offers you a total loss new-for-old replacement vehicle within the first 12 months of owning your car.
Vehicles without comprehensive car insurance are not eligible for a Back to Invoice GAP insurance or any GAP policy. Even if your car meets the above criteria, it will need a comprehensive insurance policy in place before purchasing GAP cover.
Professional vehicles, such as courier or taxi services, cannot be covered by any GAP policy with ALA. This also includes tuition vehicles, competition vehicles and any others used for hire and reward purposes. Additionally, only right-hand drive vehicles are covered, and drivers must be licenced to drive in the UK. Certain manufacturers are also excluded from most GAP policies: Maserati, Lamborghini, Rolls Royce, and Ferrari.
Why choose Back to Invoice GAP insurance?
Back to Invoice Insurance is a beneficial choice for anyone who meets the policy criteria; it may be particularly helpful if you have a fast-depreciating car model or you expect you will cover a lot of miles. By taking out Back to Invoice insurance, you protect the investment you made when you bought your vehicle. This differs from Vehicle Replacement Plus (VR), which pays the shortfall between your comprehensive insurance payout and the cost of replacing your vehicle, new for old. Since the value of a new car tends to decline over time, with some exceptions, Back to Invoice Insurance is a reliable way to help avoid a financial shortfall in the event of a total loss.
Back to Invoice GAP insurance is a suitable option if you have bought your vehicle outright or purchased it with car finance. However, if you buy the car at a discounted price or reasonably expect your car to increase in value (to buy like for like in the future), then Vehicle Replacement Plus may be a better option. If you use car leasing services you would need to look at alternative cover with our Contract Hire GAP and if you do not fit the RTI GAP insurance requirements Agreed Value GAP may be an option for you instead.
If you are unsure which type of GAP insurance is right for you, it is best to speak with one of our friendly customer support team by calling 01653 916304 today!
GAP insurance with ALA
At ALA insurance brokers, we offer four types of GAP policies – Back to Invoice Plus, Vehicle Replacement Plus, Contract Hire GAP and Agreed Value GAP. We are regulated by the Financial Conduct Authority and have a five-star rating from Defaqto on our GAP policies. We have the knowledge and experience to provide you with the best GAP coverage. You can even add Scratch & Dent Insurance, Tyre & Alloy Wheel Insurance, Keycare and Excess contribution to your policy.
Our competitive pricing is also attractive. We also have a price-match guarantee, so you can be sure to get the best deal.
How do you get a return to invoice GAP insurance quote?
Getting a GAP insurance quote from ALA could not be easier. Follow the link to our quote calculator, select your vehicle type and whether you paid in cash, on finance, on lease or another way. Then tell us whether you used a VAT-registered dealer or a private seller and when you collected your car/had it delivered. Let us know how old your vehicle is and its current mileage. You will reach the quote calculator where you can add your vehicle make, invoice price and policy term – these will all affect your policy premium.
How do you pay for your return to invoice GAP insurance?
Once you have generated your quote, you can securely purchase a Back to Invoice GAP Insurance policy through our website. You can pay the total amount for your policy at once. Alternatively, you can pay in monthly instalments (including interest) for ten months by Direct Debit.
What happens if you have outstanding finance left on the vehicle?
Once you have had your motor insurer’s payment following a total loss, if the amount owed on finance is higher than the original invoice price of the car your RTI GAP insurance policy will pay up to the outstanding finance balance. If the vehicle invoice price the higher figure at the time, RTI GAP insurance will pay up to this instead, so you are never out of pocket.
What if you have negative equity carried over from another vehicle?
ALA doesn’t cover negative equity in terms of carried-over finance. If you need GAP insurance to cover any unpaid finance from an old vehicle, look for a GAP Insurance company that provides this.