GAP Insurance or Guaranteed Asset Protection to give its full name is designed to make up the shortfall between the current market value motor insurers pay out in the event of a total loss or stolen vehicle claim, and either:
a) The amount which remains outstanding on a Finance Agreement – known as Finance GAP or b) The original amount paid for the vehicle – known as Invoice GAP
Gap Insurance is available on: -
+ Cars & light vans (up to 3.5 tons)
+ Driving Schools
+ Motorcycles
+ Motorhomes
+ Taxi
A weak car-sales market isn't just bad news for car manufacturers, dealers and the like. It can also be bad news for you the consumer. The value of used cars has declined which probably means your car is worth less than you think, and more perhaps importantly even less than you owe. This can mean that if your car is stolen or written-off, you may not get enough from your insurance policy to cover your lease or loan- leaving you out of pocket and without a car.
Car dealerships offer GAP insurance but at significantly higher premiums than typical available via a broker. We have seen examples where a motor dealer is offering similar cover at 4 times the premium. As with all insurances it pays to shop around.
Purchase Price Protection is available for up to 6 months after you bought the vehicle whereas Finance Protection is available at any time within the first 3 months of the loan.
An example of Gap Insurance:
Vehicle Cost: €20,000
Deposit: €1,000
18 months later….
Insurance settlement after write off: €12,500
Outstanding amount to pay on Finance: €14,500
Shortfall to pay: €2,000
Finance Gap will pay: €2,000
I am one year in to my car agreement with my leasing company. Can I still get GAP insurance?
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