GAP Insurance, or Guaranteed Asset Protection Insurance, helps protect you from a financial shortfall that may arise from the total loss of your vehicle. GAP Insurance policies are available for both personal cars and commercial vehicles.
Covering your business vehicle with GAP insurance is especially important since, depending on your trade, you may be more likely to suffer a total loss from frequent business use. Additionally, the cost of replacing your van or commercial vehicle may be high and could impact the cash flow of your business. Furthermore, suffering a financial shortfall when replacing your commercial vehicles could keep you off the road for longer than you need to be. GAP insurance helps to ensure that you can afford a replacement commercial vehicle quickly, so that you can be back on the road in no time.
Here, we discuss whether you can get GAP Insurance for vans and commercial vehicles; we explore what is covered by commercial vehicle GAP insurance and what the requirements are for a policy. We also discuss some GAP policy restrictions and the benefits of ALA commercial vehicle GAP Insurance.
Can you get GAP insurance for vans and commercial vehicles?
GAP Insurance is available for vans and commercial vehicles. These policies work the same way as GAP insurance for personal cars if your vehicle meets eligibility requirements.
GAP insurance is beneficial whether you you are a sole trader with one van or a whole fleet. You might have these on a type of van finance including finance lease or business contract hire. In these cases, the liability for the vehicle doesn’t expire, even when the asset has been written off. As such, commercial or van GAP insurance can offer financial protection if an accident or theft does occur.
Fleet GAP insurance is available from some insurance providers. If you have a fleet of vehicles that you want to cover, contact a member of our team and we can set up GAP Insurance policies for all of your commerial vehicles.
What is covered with commercial GAP insurance?
There are several different types of GAP insurance available for vans and commercial vehicles which are as follows:
This policy pays the difference between the vehicle invoice price or the outstanding loan balance (whichever is higher) and the market value settlement from your comprehensive vehicle insurance company. Commercial vehicles can be covered for up to four years by this policy.
This policy offers to cover the shortfall between the cost of a replacement vehicle, new for old or the outstanding loan balance (whichever is higher) and the market value settlement from your comprehensive commercial vehicle insurance company. Again, the policy is available for up to four years.
Contract hire GAP insurance is only available for leased vans or commercial vehicles with no option to buy at the end of the contract. In the event of a total loss, this type of GAP insurance covers up to 100% of outstanding rental payments and optional initial rental cover up to £3,000 if you choose this add-on. A Contract Hire Plus policy is available for up to five years.
This type of policy is available for vans and commercial vehicles bought from private sellers or ones that exceed the timeframe requirements of the other policies. In this case, we’ll cover the shortfall between the current market value and the market value at the time of policy initiation. We cover any vehicles in the Glass’s Guide.
What are the requirements for commercial vehicle GAP insurance?
Several key requirements must be met before purchasing commercial vehicle GAP insurance. The driver must be eligible to drive in the UK, and the commercial vehicle must:
Be less than ten years old
Have been delivered up to 180 days before you purchased a GAP insurance policy. Alternatively, if your comprehensive commercial auto insurance company offers new-for-old replacement within the first year, you have 365 days from delivery to purchase GAP insurance.
Have been bought from a VAT-registered dealer
Have been purchased on a Hire Purchase, PCP agreement or contract hire/lease agreement.
Be comprehensively covered by your motor insurance provider
Be less than 3,500kg
Be a standard right-hand drive without modifications against the manufacturers’ guidelines
GAP insurance restrictions
As with any personal auto insurance policy, GAP cover has some limitations. Business GAP cover is not available for:
Taxis, cabs, courier delivery vehicles
Tuition or rental vehicles
Rally, competition, or off-road vehicles
Mopeds, scooters, or motorcycles
Commercial vehicles over 3,500kg
Van and commercial vehicle GAP Insurance with ALA
Consider choosing an ALA GAP insurance policy to protect your business vehicle, We offer three types of GAP insurance for eligible vans and commercial vehicles. These include, Back to Invoice Plus, Vehicle Replacement Plus and Contract Hire Plus. Our policies provide cover for up to four years (or for five years with Contract Hire Plus).
We are regulated by the Financial Conduct Authority and the Financial Services Compensation Scheme also protects your policy.
We recognise that for vans and commercial vehicles, getting the best GAP insurance deal is essential. For this reason, we allow you to amend policy details for free and offer policy transfers without any administration fees. We also have a price match guarantee; if you find an equivalent policy cheaper elsewhere, we will match the price. Excess cover up to £250 is also available for all policies. You can insure your commercial fleet and keep your business running smoothly with ALA vans and commercial vehicle GAP insurance.
The potential payout on a GAP insurance policy depends upon the type of cover you purchase. GAP insurance gives you an additional settlement to that provided by your car insurance company following a total loss. This ensures you are not left out of pocket with depretiation or car finance.
Is GAP insurance necessary for commercial vehicles and vans?
Unlike motor insurance, GAP insurance isn’t a legal requirement for vans or commercial vehicles. However, after a total loss, GAP Insurance can help you get your motor back on the road promptly and without significantly impacting cash flow.
What if you change your van during your GAP policy?
Suppose you change your van or commercial vehicle during your GAP policy. In that case, it is usually possible to transfer your GAP insurance policy, on a pro-rata basis, with no administration costs. All you will need to pay is any difference in your commercial GAP premium.