Gap Insurnace Protection - Worth It?

[pablosbelliano]

Another dealer trick I've seen in Honda and Toyota garages is the Gap Protection, anyone took this up and think its a good idea?

[Surinder]

another dealer trick, from toyota in my experience, they may insist that you have to have the insurance to have the credit. This is bulls***, if any dealer says that get the contact details of the credit company, contact them directly and report the dealer to OFT.

Personally i wouldnt bother, but it does depend on how much risk you are willing to take on yourself.

[Fidgits]

no... useless

[nws25]

Why useless???

You get a car on finance, say £12000, over 4 years, totsl amount payable £15000, car gets written off within 6 months, insurance pays out book price of car, £11000, you still have £4000 to pay, which is where GAP insurance comes into effect, something I'm missing??

[Surinder]

Why useless???

You get a car on finance, say £12000, over 4 years, totsl amount payable £15000, car gets written off within 6 months, insurance pays out book price of car, £11000, you still have £4000 to pay, which is where GAP insurance comes into effect, something I'm missing??

assumming you repay the loan using the £11,000, you wouldnt have to pay back the full £4000. The uk consumer credit act (cant remember year) means you only pay interest while you have the loan. So if you settle a 4 year loan 2 years early you pay roughly two year's interest LESS any payments already made, at most it should work out to a few hundred pounds. NOTE NEXT PHARAGRAPH !!

The thing to watch out for is the repayments insurance, make sure if you settle up early you get a refund for any remaining period. And if you buy from toyota don't trust what the finance people say, lying bas*****. Get them to commit everything they say on dealer headed paper! and watch them change their advice :censor: This can easily add an extra £1000 to £4000 on the settlement figure depending on the loan amount. THIS is when you need the gap insurance !!

Also if they refuse to give a policy that gives a refund, go to the major insurance companys, Norwich Union, Prudential etc. They will give you monthly protection for as long as you need it and only charge by the month. No £2000 etc upfront on credit.

So i'd agree with fidgits, useless con by dealers and finance peeps.

[dub_boy]

What you want is Total Loss GAP not finance gap. Total loss Gap or Vehicle Replacement Insurance which some dealers call it is an absolute must, especially if your buying a new car.

Basically in any total loss claim within 3 years, you will get back every penny you paid for the car. So really the best thing that could happen in the 2nd or 3rd year is for your car to be written off or stolen & you get all your money back!

Doesnt sound like a con or "dealer trick" to me & its usually only £200-£300. I have dealt with customers who have claimed on their gap policies & had as much as £17000 back, not bad for £300!

Now some of you might know that I am a business manager for a car dealer & you could say my view is biased, well if that was the case why do I have Gap on my wifes & all the rest of my families cars?

Surinder, I deal with about 10-12 major finance companies on a regular basis & I'm yet to come across one who charges for credit protection insurance up front, they all charge it on a monthly basis & it can be cancelled at any time. Banks however usually do charge for it all up front. Also when you settle early you dont pay for the insurance for the original duration of the loan, but you can be charged interest for the whole period, most finance companies will give you a rebate of interest but they are not obliged to, as regulated by the consumer credit act 1974.

You really dont like dealers do you?

[Surinder]

You really dont like dealers do you?

Don't like ones that lie too me, then transfer the people involved to another dealership and claim they have left and don't know where they have gone. AND then deny any wrong doing :ffs:

Not the sort of behaviour i would expect from a dealer, back street garage yes, main Toyota dealer no!

This was the the dealer's own insurance deal (although when the policy was taken out they claimed and showed me paperwork stating it was from Paragon, which was BS), and although they claimed it was refundable, when it came to doing so i hand a fight on my hands to get the money back.

[dub_boy]

This was the the dealer's own insurance deal

Sounds strange, dont know of any dealer groups who underwrite there own insurances?

[Surinder]

to be honest near the end they where throwing all kinds of cra* at me in an effort to stop me asking for the money back. So i dont know exactly what and who underwrit the insurance. Basically the finance person lied when intially sorting out the paperwork, but they couldnt admit to that.

[pablosbelliano]

This is a deal that re-pays the difference between what the insurance company pays out and the list price of the car which seems a fair deal in the event the car is wrote off or stolen and not recovered................