Audi Financial: Gap Insurance Essential?

Audi Financial Services offers a Guaranteed Asset Protection (GAP) plan to help drivers prepare for unforeseen events, such as accidents, theft, or natural disasters, which may result in a total loss of their vehicle. GAP insurance covers the difference between the amount owed on a car and its market value, which standard insurance policies may not fully cover. While GAP insurance is not required, it is highly recommended for those purchasing a new vehicle, as it provides financial protection in the event of a total loss. Audi GAP insurance includes benefits such as waiving the difference between the insurance settlement and the outstanding balance on the vehicle's financing and covering the insurance deductible. It is important to note that Audi GAP insurance policies may vary by location and are subject to terms and conditions.

Audi Gap Insurance is no longer available for purchase

Audi Gap Insurance helps cover the financial gap if your Audi is written off. In such a scenario, your motor insurer typically pays out based on the current market value of your vehicle, which may be significantly less than its original value, leaving you with a shortfall. Audi Gap Insurance covers this shortfall, helping you get back into a new Audi or pay off any outstanding finance, lease, or hire agreement.

The cover lasts for 36 months, and the maximum claim limit is based on your vehicle's purchase price. For example, you could receive a £9,000 payment towards a new Audi. Additionally, Audi offers Gap Insurance Plus, which includes a 12-month fixed benefit that starts after the initial 36-month Gap Insurance cover ends. During this additional period, if your vehicle is written off, Audi will pay a fixed sum of either £2,5000 or £5,000, depending on the vehicle's purchase price.

While Audi Gap Insurance is no longer available for new purchases, you can explore alternative options. You can review your existing car insurance policy to check if it provides any Gap Insurance coverage. Additionally, you have the option to shop around and compare other Gap Insurance providers to find a suitable policy that meets your needs.

Gap Insurance covers the difference between the write-off settlement and the price paid for the car or outstanding finance

Gap insurance is designed to cover the difference between the amount owed on your car and its market value in the event of a total loss. This includes scenarios where your car is written off or stolen and not recovered. In these situations, your motor insurer will usually pay out based on the current market value of your vehicle, which may be significantly less than its original value, leaving you with a financial shortfall.

Audi's Gap Insurance helps cover this shortfall, ensuring you can get back into a new Audi or help pay off any outstanding finance, lease, or hire agreement. It pays the difference between the write-off settlement from your motor insurer and either the price you paid for your Audi or the outstanding balance payable to the finance company, whichever is the greater amount. For leased or hired vehicles, Audi Gap Insurance covers the difference between the write-off settlement and the early termination charge, including any rentals paid in advance as a deposit.

For example, if you bought a vehicle for €30,000 and it is written off after 24 months, your motor insurance provider may only pay out the current market value, which could be less than what you originally paid. With Audi Gap Insurance, you could be paid the difference, helping you purchase a replacement Audi.

Audi Gap Insurance Plus offers additional benefits, including a 12-month fixed benefit that starts after the initial 36-month Gap Insurance cover ends. During this period, if your vehicle is written off, Audi will pay a fixed sum of £2,500 or £5,000, depending on the vehicle's purchase price.

It's important to note that Gap Insurance does not cover property damage or bodily injury, and it may not be required by law in your region. However, it is highly recommended, especially when purchasing a new vehicle, as it provides financial protection in case of a total loss.

Gap Insurance does not cover property damage or bodily injury

Gap insurance is an optional form of coverage that helps to pay off your car loan if your car is lost or stolen and you owe more than the vehicle is worth. It is not a replacement for a primary insurance policy.

Gap insurance is not a legal requirement, and it does not cover property damage or bodily injury. Instead, it is designed to cover the difference between your primary insurance settlement and the outstanding balance on your vehicle's financing. This type of insurance is often referred to as "guaranteed asset protection" and is particularly useful if your vehicle is declared a total loss due to an accident, theft, or natural disaster.

For example, if your vehicle is financed and you still owe $10,000 to your lender, but your car is then totalled in an accident, your insurance provider will pay out a maximum of your car's actual cash value (ACV). If your car's ACV is assessed to be $8,000, gap insurance can cover the remaining $2,000 that you owe to your lender.

Gap insurance is not a replacement for a comprehensive insurance policy, which covers damage to your car caused by something other than a collision, such as fire, theft, or vandalism. It also does not replace bodily injury liability coverage, which pays for bodily injury you cause to someone else.

Audi Gap Insurance Plus includes a 12-month fixed benefit

This 12-month fixed benefit is an extension of the Audi Gap Insurance Plus policy, which is designed to cover any shortfall between the current market value of your Audi and the amount you originally paid for it. This type of insurance is important because if your Audi is written off, your motor insurer will typically only pay out based on the current market value of the vehicle, which could be significantly less than what you originally paid.

Audi Gap Insurance Plus helps to cover this shortfall so that you can purchase a new Audi or pay off any outstanding finance, lease, or hire agreements. It is important to note that as of 10th February 2024, new Audi Gap Insurance policies are no longer available for purchase. However, any policies purchased before this date will remain valid according to their original terms and conditions.

The Audi Gap Insurance Plus policy is a valuable option for Audi owners as it provides peace of mind and financial protection in the event of a total loss. It ensures that you will have financial assistance to get back on the road with a new Audi or to settle any remaining financial obligations associated with your previous vehicle.

Gap Insurance is not required in Los Angeles

Gap insurance is not a requirement in Los Angeles, or anywhere else in California. It is an optional coverage type for qualifying vehicles but is banned from being required as a condition of a loan or auto sale.

Gap insurance is specifically designed for drivers with outstanding loan balances on their vehicles. It is typically only available for brand-new vehicles or for models that are less than three years old.

Gap insurance is different from new car replacement coverage. While gap insurance covers the difference between what you owe on your auto loan and the payout you receive from your insurer if your vehicle is stolen or rendered a total loss, new car replacement coverage helps drivers obtain a new version of their damaged vehicle's make and model after a total loss.

Gap insurance does not come cheap. The average cost of gap insurance in California is $2,238 per year, according to a 2023 rate analysis by Insurance.com. In Los Angeles, the rates are even higher, with the average cost of gap insurance being $2,755 per year, or $230 per month.

However, if you have a lease or loan agreement, your lender will most likely require you to purchase gap insurance. But you can drop the coverage as soon as your car loan becomes lower than the value of your car.

Audi offers its own Gap Insurance and Audi Gap Insurance Plus, administered by Car Care Plan Limited and underwritten by Motors Insurance Company Limited. However, as of February 10, 2024, new Audi Gap Insurance policies are no longer available for purchase.

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