What does GAP Insurance Cover?
GAP insurance provides valuable protection during the early part of your car's lease. Current statistics show that the risk of your vehicle being stolen or written off is now greater than ever before.
Statistically in the UK new cars depreciate by 40% to 50% over the first 3 years.
Around 350,000 vehicles are stolen every year, which is equivalent to one every two minutes. There are over 240,000 road traffic accidents that may result in an insurance total write off.
What is Gap insurance?
If a loss occurs, GAP insurance will pays the difference between the cash value of the vehicle and the current outstanding balance on your lease.
If your vehicle has been written off by an accident or by theft, your insurance company will typically pay out the actual cash value. This can often be less than the actual retail value and is often considerably less than the amount you still owe to pay of the lease..
The amount of the loss from this financial shortfall is the gap
Do I have to have Gap ?
Most lenders who finance cars do require fully comprehensive insurance but not Gap insurance, so the owner would have to pay the depreciation difference if they experience a total loss of their vehicle and chose not to add Gap insurance to their policy.
How do I buy GAP?
Most dealerships or finance companies can supply GAP insurance as an extra to your lease. Ask for a quote and your will be happy to assist you. GAP is usually a single payment and will cover you for the term of your lease.