Is gap isurance wise to take?

[Andrew56]

Does anyone know how new car replacement works in practice in the current climate - in which as we know it can take several months to take delivery of a new vehicle?

[IT Troll]

Ultimately they are just giving you a bag of cash to settle the claim. So you could indeed be waiting some time for a replacement. But you are free to shop around.

[GR Weasel]

Thanks for the advice, Just taken out a policy with ALA for my Yaris GR Sport, Toyota Dealer wanted £508 for gap insurance, but got it for £230 with ALA for 3 years Vehicle Replacement.

[RonYarisX]

The question is, is GAP worth it? Only the buyer can answer that but it's worth knowing exactly what GAP actually is and not what some salesperson who stands to make commission out of the sale tells you what it is. It also depends on how you purchase the car. A simple question but unfortunately not a simple answer.

In the old days as soon as a car drove off the forecourt it lost money. What GAP is supposed to do ( always read the small print ) is if it's a total loss, it to pay the difference between the price of a new car and your invoice price. ( note: not the list price of a new car, the invoice price of the car you bought. So you can still be well out of pocket. ).

Now that's very important because as we've seen on the Yaris Cross on this forum, the value seems to go up in the first year. ( supply and demand ). Seems to be completely pointless taking GAP out on a Yaris right now but that's my opinion, others may differ.

There are two scenarios and the necessity of GAP may differ for each. Who owns the car - you or the finance company?

It's also worth noting that not all insurance policies provide a similar service. Many only offer it in first 6 months whilst others may offer it under certain conditions. In other words, always read the small print.

GAP is often mis-sold too. Those selling policies will tell you if you write off your car you could be £8000 out of pocket because that could be the difference between what your car is worth and a new car. But that's not like for like. If you write off a 6mth old car, why are they comparing it to driving off in a brand new car? The comparison should be driving away in another 6 month old car i.e. like for like.  Insurers like to play with words to make their product look as if it's a must have. It's really a con trick. If you write off your car then you should be receiving market value for it from your insurer. You then use that money to by a replacement. If the like-4-like replacement costs more then obviously you didn't receive the market value.

Of course then there's the risk factor. If a Yaris Cross costs £27k brand new - it's going to take some doing to write that off. And then it has to be YOU that writes it off, if it's someone else then they're liable and it's their insurer who pays. The probability of YOU writing off a car rather than someone else writing off the car is pretty damned small.

I've never taken out GAP, never seen the need for it.

If it's the finance company who owns the car:

This adds an additional problem - you may find yourself owing much more than the car is actually worth. Like-4-like isn't an option because you'll need to settle the outstanding finance. PCP, HP, bank loan etc. they all work differently so the benefits will be different too. In my book it would be criminal for say a car to be sold on HP without some sort of protection. Read your contract, you may find you're already covered and the salesperson is trying to sell the same insurance twice.

[FROSTYBALLS]

18 minutes ago, RonYarisX said:

What GAP is supposed to do ( always read the small print ) is if it's a total loss, it to pay the difference between the price of a new car and your invoice price.

However, the above is only one type of GAP insurance. There is a second type, vehicle replacement, and a third type for contract hire vehicles.

[IT Troll]

38 minutes ago, RonYarisX said:

What GAP is supposed to do ( always read the small print ) is if it's a total loss, it to pay the difference between the price of a new car and your invoice price. ( note: not the list price of a new car, the invoice price of the car you bought. So you can still be well out of pocket. ).

It depends on what GAP policy you buy. A vehicle replacement policy will top up the market value paid by your main insurer to the current replacement cost, even if this is more than your invoice price.

38 minutes ago, RonYarisX said:

If a Yaris Cross costs £27k brand new - it's going to take some doing to write that off. And then it has to be YOU that writes it off, if it's someone else then they're liable and it's their insurer who pays.

If someone steals the car and has a fun old joy ride they're unlikely to have insurance. Setting off a couple of air bags can be a write off.

[FROSTYBALLS]

58 minutes ago, RonYarisX said:

If a Yaris Cross costs £27k brand new - it's going to take some doing to write that off.

Generally if the repair costs (including parts, labour, etc) are 50% or more of the car's market value, then the insurer will write the car off. It then becomes the property of the insurer, and if repairable, will go to auction for the insurer to recoup some of their costs.

[RonYarisX]

6 minutes ago, FROSTYBALLS said:

Generally if the repair costs (including parts, labour, etc) are 50% or more of the car's market value, then the insurer will write the car off. It then becomes the property of the insurer, and if repairable, will go to auction for the insurer to recoup some of their costs.

 

I think you may find the percentage is higher than that but even going on what you say, that's a £13500 repair bill. And only if it's an 'at fault' claim.

But as I say, risk is up to the individual.

Never ever let a salesperson or a company who stand to make commission or profit out of their service influence you on that decision.   

 

[Gorjam]

May be helpful for someone, Moneysavingexpert.

[FROSTYBALLS]

32 minutes ago, RonYarisX said:

I think you may find the percentage is higher than that but even going on what you say, that's a £13500 repair bill.

No. My neighbour's son had his 22 reg Golf GTi stolen last year - it was used in an armed robbery, used for drug taking, crashed and badly damaged. Although it may vary from insurer to insurer, the 50% threshold was quoted to him by his insurer - Volkswagen Insurance.

[RonYarisX]

18 hours ago, FROSTYBALLS said:

No. My neighbour's son had his 22 reg Golf GTi stolen last year - it was used in an armed robbery, used for drug taking, crashed and badly damaged. Although it may vary from insurer to insurer, the 50% threshold was quoted to him by his insurer - Volkswagen Insurance.

Wonder how many armed robbers have considered a Yaris Cross as their get away car?

[Mojo1010]

Only one new car I had lease in the past, didn't take GAP for that, not planning to for my next new yaris. Yaris price gone up, like ron said, if the other party at fault their insurance will pay all. Plus it's like for like market value. So I will never pay for GAP.

[anchorman]

20 minutes ago, RonYarisX said:

Wonder how many armed robbers have considered a Yaris Cross as their get away car?

They’ll use anything as a pool car including a Cross.  They used my Mazda as a pool car by cloning it with cheap number plates.  They drive around on somebody else’s tax and insurance and give them the luxury of any driving offences.  Mine was high powered so when they eventually got into a chase the only way of stopping it was with a stinger which wrecked the front end.  It reeked of alcohol and drugs so this lot drive smashed out of their heads and when caught they always say it was round the corner with the keys in so the worst our woke snowflake human rights lawyers will allow is TWOC - taken without consent.  Congratulations Sir Kier, you must be very proud.  

[FROSTYBALLS]

As far as I'm aware there is no such thing as 'like for like' market value - there is trade value, market value or retail.

[DAN@ADRIAN FLUX]

Hi.

Just to let you know that we offer a 12 month product called Total Loss Protection. Whilst it's not exactly the same as your traditional GAP insurance we feel for some customers it can make a cost effective alternative.

Please feel free to take a look if you wish.

https://www.adrianflux.co.uk/extras/total-loss/

Regards,

Dan. 

[ISL]

In 2019 I had a total loss on an 18 month old car. The insurance paid out a generous 3K less than invoice value. Due to the original large discounts not being available on my model of car the GAP insurance paid out a further 10K which gave me around 7K over invoice value. I was now in the position of having 7K more in my pocket than I did 18 months previously. To make it easier there was no finance on the car. 
 

Since then I have always spent a little more on replacement rather than invoice GAP.  I have just bought a 4 year policy from DIRECT GAP for £239 which is for a Yaris Design model.

[Cyker]

Niiiice   It's rare to 'win' vs insurance  

 

[ISL]

@Cykerespecially when I accidentally drove into flood water.

Apparently insurance companies will pay out for flood water providing that you do not ignore a “Road Closed” sign.