GAP insurance when used prices are so high

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canrage
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Joined: Mon Nov 01, 2021 9:57 pm

Post by canrage »

Morning! I’m picking up my Life Pro Performance today and I am really excited :D

I’m looking into GAP insurance and am aware that used prices are really high right now. It also doesn’t look like supply chain issues are going to stop any time soon. So if the purpose of GAP is to prevent against depreciation in the event of a total loss, and cars are holding or even increasing in value, is there any point in buying this insurance right now?

Grateful for any advice!

andrewparker
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Post by andrewparker »

I always buy vehicle replacement gap insurance, so the difference between the insurance payout and the cost of replacing the vehicle at the time of total loss is covered. But you’re right, at the moment you’d be safe to assume your vehicle will be worth more than you paid for it. That won’t last forever though.

My wife wrote off a BMW 325Ci that we bought new in 2003, just two months before the gap policy ran out. After that I’ll never not have gap.
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Salmonfisher
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Post by Salmonfisher »

You raise a good point. Presumably insurance pay-out could be even more than you paid? Personally its years since I bothered with GAP and I I have saved more than I would ;lose with a right off. Insurance covers the first year with a new car replacement anyway. Mind you I buy outright and if I had a big potential lease shortfall i might consider it. If you do then shop around because VW like all dealers make a mint on it which is why they sell it so hard.
darcy67
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Post by darcy67 »

Depending on who your insurance is with it might include a years cover.

NFU include 2 years and LV include a year.
monkeyhanger
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Post by monkeyhanger »

I don't bother with GAP. When you're buying a £30k car, it takes a seriously catastrophic amount of damage to write it off. That stands true for a car with good residuals when it's 2 or 3 years old.

As previously mentioned, most standard insurance covers replacement in year 1.

I had a MK5.Golf GT Sport TDI170 clouted by a bus when it was 2 weeks old and left 12 feet from where I parked it. The damage was extensive and it wasn't written off. I wish it had had've been. The repair was terrible.and I hated that car as a result for the whole time I had it..

Insurance puts you back in the condition you were at the accident e.g. 2 year old car written off and given enough money to buy another 2 year old car.

GAP gets you beyond tgat in the highly unlikely event your car is written off.

Unless I was leasing, with the lease company assigning a ludicrously high used value, I wouldn't bother with GAP. If you feel the need, go with ALA directly and search for discount codes, you should get a decent 3 year policy for about £160.
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Deleted User 192

Post by Deleted User 192 »

Only time I’ve had a car written off was 20+ years ago, and it was a company car that I used to drive stupidly.

I haven’t made a claim on my own insurance for about 15 years.

I don’t bother with GAP.
canrage
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Joined: Mon Nov 01, 2021 9:57 pm

Post by canrage »

Thanks so much for the advice!
Slathe
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Post by Slathe »

I have never bothered with GAP insurance either for the reasons the others have already stated.
Scratch
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Post by Scratch »

I looked into GAP insurance on my last car. Having read all the small print, I didn't bother with it. It seemed like a typical insurance document where they seemed to have a way of weaseling out of paying for a lot of situations. But then I am a fully paid up cynic. Again, didn't bother with GAP with the ID3.
andrewparker
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Post by andrewparker »

It's hugely beneficial if you're unlucky enough to have a car stolen or written off, regardless of who might be at fault.

For example, in 2006 our BMW 325Ci was written off after a collision with an HGV. We were completely blameless and the haulage company's insurance paid out market value for the car. We had bought it new in 2003, so it had suffered nearly three years of depreciation, but because we had RTI gap, we ended up coming out of it with £25k minus the insurance excess.

A few years ago a friends two year old Range Rover Sport caught fire on the M62. Again, put back in the same position financially as when he bought it new.

Similar story with a friend who had his M235i stolen from his driveway.
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monkeyhanger
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Post by monkeyhanger »

At the end of the day, it's insurance on top of insurance that leaves you in a better situation than you were pre-incident.

Write- off is a highly unlikely scenario for most cars that are moderately expensive and hold their value well. If I had a high perfornance car and lived in an area renowned for car theft (Coventry/Birmingham always seem to be hotspots for Golf R and Audi S3 thefts) I'd be more likely to take it out.

Never had a but of bother with my Gokf R in North Tyneside or a string of other VW hot hatches.
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Griff
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Post by Griff »

[quoteI’m looking into GAP insurance and am aware that used prices are really high right now. It also doesn’t look like supply chain issues are going to stop any time soon. So if the purpose of GAP is to prevent against depreciation in the event of a total loss, and cars are holding or even increasing in value, is there any point in buying this insurance right now?][/quote]

This exactly what I was wondering. Does anyone know how insurance companies define "market value"? i.e. are the prices quoted by Motorway/WeBuyAnyCar et.al. an indication of what insurance companies will use ...or do they have their own algorithm?
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monkeyhanger
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Post by monkeyhanger »

First amount offered is usually a mickey-take. You have to go back at them and demonstrate how much you need to get a suitable replacement - dealership and autotrader ads etc.

I don't take out GAP, it's insurance on top of insurance for a highly unlikely event. It takes a hell of a lot of damage to write off.a 0-3 year old car with very good residuals, and year 1 is usually a new replacement under a standard policy.

An old colleague used to take out GAP every time he got a car and just before it reached 3 years old, it would be stolen and burnt out. He did this 4 times in my 13 years at that place of work.
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Audi S3 - because I hate rapid charging for long distance driving.

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Griff
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Location: Scotland

Post by Griff »

monkeyhanger wrote: Fri Jan 21, 2022 9:41 am First amount offered is usually a mickey-take. You have to go back at them and demonstrate how much you need to get a suitable replacement - dealership and autotrader ads etc.

I don't take out GAP, it's insurance on top of insurance for a highly unlikely event. It takes a hell of a lot of damage to write off.a 0-3 year old car with very good residuals, and year 1 is usually a new replacement under a standard policy.

An old colleague used to take out GAP every time he got a car and just before it reached 3 years old, it would be stolen and burnt out. He did this 4 times in my 13 years at that place of work.
Thanks, good point. All insurance is the same...if you need to use it, it's the best thing ever, if you don't need it, it's a waste of money>

I guess your old colleague is partially responsible for us all paying more for our insurance.
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Solwayboy
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Post by Solwayboy »

I’ve never bothered with gap insurance. The one time that I was hit by another and they offered an unacceptable settlement, I wrote to their insurer advising that I would pursue settlement directly with the driver via the county court. I further reminded them that any issues re settlement were between them and their client and were nothing to do with me. They immediately settled the full amount. Legally, the insurance is a distraction from the two people involved.
andrewparker
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Post by andrewparker »

Solwayboy wrote: Fri Jan 21, 2022 5:13 pm I’ve never bothered with gap insurance. The one time that I was hit by another and they offered an unacceptable settlement, I wrote to their insurer advising that I would pursue settlement directly with the driver via the county court. I further reminded them that any issues re settlement were between them and their client and were nothing to do with me. They immediately settled the full amount. Legally, the insurance is a distraction from the two people involved.
You don’t take it out to cover the eventuality of getting a poor settlement figure in the event of a total loss.
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