Gap Insurance

[Chris Dance]

Today I received a letter from Toyota finance suggesting I should renew my GAP INSURANCE on my 3 year old Prius Gen 2. The cost £12.50 per month. I purchased the gap insurance on the suggestion of the salesman when the car was new. I have decided NOT to renew it. I would be interested if others on this forum take out gap insurance when purchasing a new Prius or renew it when the policy comes to an end. Has anybody ever claimed on their gap insurance and do folks on this forum consider it good value?

I look forward to all replies.

Chris.

[monya]

I was offered it but declined. Usually the dealer who acts as intermediary takes a good cut. Look for a broker for a better deal if you value this type of insurance but on a 3 year old car the premium may be unpleasant.

[cootuk]

A lot would depend on the amount left on the hp agreement and the insurance value of the car compared to the cost of the policy as the Toyota hp is fully front loaded on finance. For us the difference was 3-4k so a 200odd pound policy was good value.

The Toyota quote was also fairly competitive.

[Seamaster73]

The commission/incentive the seller gets for punting "gap" insurance is so good, I know of instances where customers who have refused it have had the price of their new car discounted by the same amount, and given the policy for free.

[ian rooke]

Hi most people do not realise on a new car most insurances cover you for total loss in the first year so the gap insurance will not pay out.

[ajayre]

The commission/incentive the seller gets for punting "gap" insurance is so good, I know of instances where customers who have refused it have had the price of their new car discounted by the same amount, and given the policy for free.

That is exactly what happened to me.

Andy

[johalareewi]

Hi most people do not realise on a new car most insurances cover you for total loss in the first year so the gap insurance will not pay out.

Depends on your policy.

A lot of them will only do a new for old replacement to the value of the original car. The prius has had a £2k price hike since I got mine and I got mine on the scrappage scheme which reduced the list price by £2k. So at the moment my gap is about £4k.

I said no to the GAP insurance but the dealer was so keen to sell it they cut the price to £95 which was cheaper than the internet deals and it lasts for 3 years. So it does pay to take the dealer to the line for GAP and superguard etc.

[ian rooke]

Hi some times it can work in your favor when my car was written of after 6 weeks it was a T4 which I paid £19400 list £21000 the car insurance paid out on the list price not what I paid for it, this did surprise me as I only expected to get what I paid perhaps they were being lazy or for once I was lucky.

[Chris Dance]

Looks like that if it is a new car purchase then the gap insurance could be good to have.

[johalareewi]

Looks like that if it is a new car purchase then the gap insurance could be good to have.

The main reason for the GAP insurance is to insure you against the difference between the value of the car in a write off, and the outstanding finance. If you have gone for a low deposit, minimum payments scheme, the car will always be worth less than the outstanding finance amount.

If you buy outright and your insurance company operate a new for old policy in the event of a write off, GAP insurance is probably not needed.

[Ikelos]

when we got our car we were offered gap insurance, we said no, when we got home we looked up the price online, it was a fraction of what the Toyota dealer wanted, and still we never went for it, it seemed a waste of money.....................

[Doesn'tExist]

Like with any insurance product it is about risk mitigation, it will only be useful if you need it. Are you financially strong enough to overcome the risk if it matures then you don't need it. If you worry about loosing a few thousand pounds, then perhaps spending a couple of hundred is a good idea.

It is very personal and there is no right answer.