GAP insurance
Would it be prudent to take out GAP insurance on a car you have financed? does it actually pay out or is it like all these warranty policy's you see that try to wriggle out of paying out any money for repairs? Gap insurance is well worth taking.Working in car sales the car itself is minimal in terms of commission (the franchise I work for pays a fixed £50 per unit, some dealers pay 10% of profit, others just put all your profit in a pot and a total percentage on your pot at the end of the month), the main bulk of the commission is earnt in the add ons, such as paint protection, tyre and alloy, gap and obviously finance commission. Hence why generally you'll notice the sales person have a strong push and try and close you on some products.
If you're only selling units with no addons or finance you won't be in a job for long.
The only add on that is actually worth taking out is the gap insurance. When you take finance on a vehicle if you are involved in an accident and your car is declared a total loss, your insurer will pay out market value for your vehicle. But you are responsible for the shortfall (i.e the money outstanding on your finance agreement)
So let's say your car cost you £10,000, and in 2 years time your car is written off. Your insurer pays out market value which is £6500, and your outstanding balance on the finance is £8000 you would have to find £1500 out of your own pocket.
With gap insurance you would simply receive 2 payments, one from your insurer and the other from the provider of gap insurance.
The process is pretty straight forward, you liaise with both insurers (obviously) but you're not able to accept an offer from your main insurer until you've been given the ok from your gap insurance provider.
One common objection I'm given is "but I can get gap for 50 quid online". The thing with these third party providers online is the same with say mobile phone insurance.
You could get covered by the likes of a third party like protect my bubble, pay 3 quid a month, but in the event of a claim you're waiting for weeks, lots of forms to fill out etc. When you take out insurance direct from the mobile network yes it's more expensive, but it's generally a much quicker process.
Most people roll their eyes at any insurance product, many people stop me halfway through and tell me they're not interested but it really is a good product. The likes of paint protection whether it's diamondbrite, supaguard etc is a good product but not at the price it's sold at. It's applied by the valeters who generally don't apply it properly, and the mark up is insane. It costs about £15 and depending on the dealer you're paying a few hundred for it. You can source it on ebay and apply it yourself, it's simply sprayed on the interior, and the exterior is simply applied like a polish. Could you recommend any good suppliers Are you looking at taking it from a separate third party then? I assume you were offered it at the dealership but declined?
Where I work the GAP insurance is supplied by Auto Protect, and it's who I've got policies with myself on my private car (I've had to claim once from them and I had no issues at all.)
Try and get combined gap too, most dealerships supply that nowadays but not all of them.Some supply soley RTI (return to invoice). The advantage with combined gap is should your amount outstanding on your finance agreement be higher than your original invoice price then it covers that too.
Using an example you pay car at £10,000, insurance pays out £6500 and you have return to invoice gap you would receive a pay out of £3500. But if there's still more owing to the finance company you're still responsible.
With combined gap, regardless of the outcome you're fully protected for the 3 years of your policy. In the event of a claim it pays out the greater amount whether that be the "finan ce gap" or the "return to invoice gap". I wasn't offered it at the dealership, when I'm doing quotes do I put the price I paid for the car or the finance figure? Depending on the type of gap you are getting a quote for will depend on the information you need to provide.
On Return to invoice gap it's simply the invoice price for the car. Finance gap would ask you for additional information relating to your finance agreement, and lastly combined (best type of gap cover) would ask you for all the required information.
Either way the website you're using should make it ABSOLUETLY clear what information they require. You should know whether it's the invoice price or total finance agreement. Can I phone up auto protect or is it a dealer only company? I don't believe you're able to get insurance products directly from Auto Protect (their services are normally obtained via an FCA regulated agent) in this case being a sales executive, business manager etc at a dealership.
You can get quotes for gap insurance online though through other vendors e.g Gap Insurance - MoneySuperMarket However I've got no first hand experience with the suppliers of policies via moneysupermarket. I have always put GAP insurance on financed cars.
For the last few i have used ALA insurance. I know people who have claimed with them and been fine.
When I took it out on my wifes new Polo last year, it cost £75 for 3 years cover for their back to invoice plus policy which means no matter what happens, if the insurance company pays out less than the original invoice price then they will pay the difference. If however the finance settlement number is higher than that then they will pay that difference instead.
Google them and you can then apply online or by phone Flipside, I've never taken GAP on any car, bought or leased.