The thought of having your vehicle stolen is simply terrible, but most of us live under the presumption that fortunately, it is not something that we will ever have to experience.
Many of our clients tell us on a daily basis how “it will never happen” to them, but in reality, one day it could. For me, it did.
I never expected to leave the gym on a Saturday afternoon to find my car gone. I promptly contacted my motor insurer who to my relief, settled it quickly and efficiently. Luckily, I also had Gap cover, and this enabled me to not only pay off the shortfall on my loan, but to also put a significant deposit toward a new car.
What is Gap Insurance?
Guaranteed Asset Protection (Gap) is available regardless of whether you have bought a new car on finance, or outright.
Concerning a new car on finance, most people think that Gap insurance will only cover the difference between any outstanding finance and the settlement from insurers.
If you bought a new car on finance, and it is stolen or totalled, Gap insurance should, in fact, cover the difference between the original invoice value (not only money that you still owe) and the payout from your car insurance policy.
If you bought a new car outright, Gap insurance will cover the difference between the original amount that you paid for the vehicle, and the amount that your car insurance policy pays out – the vehicles current value, likely to be much less than the total you paid.
Gap cover provides peace of mind that, in the unfortunate event that your car is stolen or crashed and written off, you will not lose any money. For a new car, a Gap policy should last for at least 3 years, or until you make a claim.