What is GAP?
General asset protection or GAP insurance is probably most needed when you are buying car on finance. Just imagine you shake the car dealers hand on the deal for your brand new car for a comfortably expensive sum, drive the car off the fore court, which as we know the car already depreciates in value and you crash or your car gets stolen. Your car insurance will only pay out for the car that it is valued at now….which is less than the finance lease you just signed. What will you do? Well if you had GAP insurance, also alternatively known as Return to Invoice or RTI cover then this policy would bridge this financial ‘gap’ and this is why GAP insurance is important.
The Business Insider suggests that Eighty-two percent of new cars in Britain are currently bought under PCP agreements and that they say is in according to the Finance & Leasing Association, which tracks car credit data. Therefore the potential need for this type of insurance is pretty high. However consumers aren’t really aware that they need it because they think that their car insurance will replace their car anyways. This is true of course but the car will be replaced at the lower financial rate of course which means that if your car was brand spanking new you would potentially receive a second hand car in receipt of an insurance claim.
Is GAP insurance a necessity item? Absolutely not but like any insurance it does provide you peace of mind and the assurance that you will receive like for like, apples for apples.
When to buy GAP insurance? Policies are usually up sold to the customer along with their brand new car which hasn’t proved a good deal. Interest rates are hiked up and a simple, non comprehensive cover is being sold which proves expensive and problematic should the customer need to claim. And this is exactly why GAP insurance has gained a bad reputation.
Which GAP insurance is best? The simple answer is that the consumers need to do their own research. Each car and situation and therefore policy is different. However it is now common thought to think that there are better deals and a cheaper price tag if you buy online but it is important for the consumer to remember that this is an option open to them. It is easy to purchase insurance in the heat of the moment and take the easy option but if the time comes when you need to make an insurance claim would you be absolutely confident in your insurance cover?
At Best Price FS we want to be known for providing an online solution for insurance which provides a comprehensive cover at the Best Price and we are confident in the structured products that we provide our customers.