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The pros and cons of GAP insurance

If your car is stolen or written off, your car insurance only covers you up to its value at that time. This means that, if your car is relatively new, you'll lose out a lot of money compared to what you initially paid. GAP insurance could cover the distance between what your car insurer pays out and the amount you paid for your vehicle.

If you're wondering whether or not you need GAP insurance, it's worth considering the pros and cons. Here are the main advantages and disadvantages of GAP insurance.

The benefits

  • It will offset your car's depreciation: It's a well-known fact that a new car's value depreciates very quickly. For this reason, if your car is stolen, written off, or destroyed in a fire within its first few years, your car insurance will only cover the value of your vehicle at the time of the accident. GAP insurance could cover the remainder, allowing you to recuperate the price that you purchased your vehicle at.
  • You will receive a like-for-like replacement: If you bought a brand new car outright, you shouldn't have to settle for a second-hand replacement. With GAP insurance, you won’t have to! One Call's GAP insurance can pay out the difference between the amount your car insurance pays out and the amount quoted on your original purchase invoice.
  • It will pay off your finance: If your car is financed or leased, gap insurance can clear any outstanding balance, ensuring you're not left out of pocket as a result of your car being written off, stolen, or destroyed by fire.
  • It can be useful with PCP: GAP insurance can also be useful if you got your car on PCP and it is written off or stolen. It can clear your outstanding payments, as well as any interest you might accrue and the balloon payment that is due at the end of the contract.
  • You can cover the excess on your car insurance: One of the advantages of having GAP insurance cover with One Call is that we cover up to £500 towards your car insurance excess.

Things to consider

  • You might not need it: GAP insurance, just like car insurance, is great if you ever need to make a claim. However, if you never need to make a claim, you won’t experience the benefits that it can offer.
  • An extra expense: Buying GAP insurance is an extra expense. However, if you purchase your policy from One Call Insurance, you will have the ability to spread the cost over 12 individual monthly payments.
  • It can be costly (depending on where you buy it): Dealerships tend to be the most expensive places to buy GAP insurance. For that reason, it could be worth shopping around rather than purchasing the cover offered from the same place that you bought your car.
  • There are exclusions: All insurers are likely to have some exclusions. For example, One Call’s GAP insurance is only available on cars that are under eight years old and are covered by fully comprehensive car insurance. Be sure to check the terms and conditions of GAP insurance policies to confirm you will be covered.
  • It might not be the best cover for you: Generally, GAP insurance is best suited to newer cars and ones that are leased or financed. However, if your car is under 12 months old, some car insurers may choose to replace it outright, which means you would not need GAP insurance. For used cars, GAP insurance might not be as beneficial. This is because older cars tend to depreciate at a slower rate.

These points are worth considering in order to work out if GAP insurance could be worth it to cover your car. For more information, explore our guides to different types of GAP insurance and comparing GAP insurance options.

When you're ready for a quote, visit One Call Insurance and see if our GAP insurance is best for you. One Call offers the best level of GAP insurance cover, which will cover both the return to invoice amount or the outstanding finance amount even if on contract hire. So whichever is the higher amount, the GAP insurance policy will cover it. For more information, contact us via live chat.

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