Jane Dotson
Return to Invoice RTI GAP insurance is a type of insurance that covers the difference between what you paid for your car and the insurance payout. It is designed for those who have financed their car and are concerned about not getting the original value of their car back if it is written off by their insurer. RTI GAP insurance is available for new and used vehicles purchased from a VAT-registered dealer within the last six months and covers vehicles up to 8 years old with less than 100,000 miles. The cost of RTI GAP insurance depends on the specific vehicle and the policy particulars, such as length and voluntary excess, with prices starting at £4.13 per month. So, is RTI GAP insurance worth it? Let's find out.
| Characteristics | Values |
|---|---|
| Type | Return to Invoice (RTI) |
| Use | Covers the difference between the price you paid for the vehicle and its current market value |
| Cost | From £4.13 a month (based on a 24-month plan) |
| Who is it for? | For those with a valuable car that has likely dropped in value since it was obtained |
| Who is it not for? | If you don't need to replace your car with a brand new one of the same model, make and specifications, you may not need GAP insurance |
| Where to buy | Online providers or specialist GAP insurers |
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What You'll Learn
- RTI gap insurance covers the difference between the price paid for the car and the insurance payout
- It is designed for cars bought from a VAT-registered dealer within the last six months
- It is useful for those who have taken out a loan to buy a new car
- It is not worth it for those who only want to replace their car with a similar model
- It may be worth it for those who want to replace their car with a brand-new model
RTI gap insurance covers the difference between the price paid for the car and the insurance payout
Return to Invoice (RTI) GAP Insurance is a popular type of cover that ensures motorists are protected in the event of a write-off. It covers the gap between what you paid for the vehicle and the insurer payout. This can be particularly useful if you have outstanding payments on a personal loan or finance agreement. In such cases, you could end up paying instalments on a car that is no longer on the road, or the finance company may insist that you pay off the loan entirely.
RTI GAP insurance is designed to cover the difference between the price you paid for the vehicle and its current market value. If you bought a car on finance for £20,000 and it depreciated by 60% in three years, the car would be worth £8,000. If the car was written off, your insurer would pay the market value of £8,000 (minus any excess), leaving you £12,000 out of pocket. RTI GAP insurance would cover that £12,000 shortfall, allowing you to purchase a brand-new car.
RTI GAP insurance is available for new and used vehicles purchased from a VAT-registered dealer within the last six months, up to eight years old, and with less than 100,000 miles. It is important to note that RTI GAP insurance won't payout if your vehicle isn't considered a write-off by your insurance or if your insurance policy isn't comprehensive. Additionally, it may not cover "normal use" of the vehicle.
RTI GAP insurance can provide peace of mind and financial protection if you are concerned about your car losing value or if you want to ensure you receive the original amount you paid for your vehicle in the event of a write-off or theft. It is worth considering if you want to protect yourself from the potential financial burden of continuing to make payments on a car that is no longer in your possession.
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It is designed for cars bought from a VAT-registered dealer within the last six months
Return to Invoice (RTI) GAP Insurance is a popular type of cover that ensures you are protected in the event that your car is written off. It covers the gap between what you paid for the vehicle and the insurer's payout. RTI GAP insurance is designed for cars bought from a VAT-registered dealer within the last six months. It is also available for cars that are under eight years old and have less than 100,000 miles on the odometer.
RTI GAP insurance can be particularly valuable if your car is on a finance agreement or you have outstanding payments on a personal loan. If your car is written off, your insurer will only pay out the resale value of the car at the time of the claim, which may not be enough to cover the remaining loan amount. With RTI GAP insurance, you can avoid being stuck paying off a loan for a car that you no longer have.
It's important to note that GAP insurance is not just for new cars. While it is commonly associated with new vehicles, you can also purchase GAP insurance for a second-hand car that is under seven years old. After this age, insurance companies typically will not cover the gap.
The cost of GAP insurance can vary, but policies can start from as little as £4.13 a month (based on a 24-month plan). You can usually pay your premiums in monthly instalments, and some providers may offer flexible payment options. However, it's worth noting that GAP insurance may not be for everyone. It is designed to protect against the financial impact of a written-off or stolen vehicle, so if you are not concerned about this risk, GAP insurance may not be necessary.
Finally, it's worth mentioning that there have been recent changes to the GAP insurance market, with many car dealers no longer selling GAP insurance as of February 2024. However, there are still online providers and specialist GAP insurers offering policies, and you can often find the same or better policies for much less money. Additionally, providers like MotorEasy and Direct GAP have resumed normal operations after the FCA intervention.
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It is useful for those who have taken out a loan to buy a new car
Return to Invoice GAP insurance is a popular type of cover that ensures you are protected in the event of a write-off, covering the gap between what you paid for the vehicle and the insurer's payout. It is particularly useful for those who have taken out a loan to buy a new car.
When you take out a loan to purchase a vehicle, you may end up owing more than the car is worth. This is because new cars can lose up to 40% of their value in the first year, and up to 60% in three years, according to the AA. If your car is written off or stolen, your standard insurer will only pay out the resale value of your car at the time of your claim, leaving you out of pocket and still owing money on your loan.
RTI GAP insurance will pay the difference between the insurer's payout and the price you paid for your car, or what you owe to a finance or leasing company. This means that you won't be left paying off a loan for a car that you no longer have. RTI GAP insurance can also cover any outstanding finance, paying off the remaining loan amount so that you don't have to.
RTI GAP insurance is available for vehicles purchased from a VAT-registered dealer within the last six months, or in some cases, up to a year. It is important to note that GAP insurance cannot be purchased on the day the car is sold, and there is a seven-year age limit for vehicles to be covered.
While RTI GAP insurance can provide valuable peace of mind, it may not be necessary for everyone. It is important to consider your specific circumstances and needs before deciding whether to purchase this type of cover.
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It is not worth it for those who only want to replace their car with a similar model
Return to Invoice (RTI) GAP Insurance is a popular type of cover that ensures you’re protected in the event of a write-off, covering the gap between what you paid for the vehicle and the insurer payout. However, it may not be worth it for those who only want to replace their car with a similar model.
RTI GAP insurance is designed to cover the difference between the price you paid for the vehicle and its current market value. This type of policy is particularly valuable if your car is on a finance agreement or you have outstanding payments on a personal loan. It can help you avoid being stuck making repayments for a vehicle you no longer have or being seriously out of pocket if you paid for it outright.
However, if you only want to replace your car with a similar model, a standard car insurance policy should suffice. Your car insurance policy should allow you to replace your car with another one of a similar age and condition when yours is written off. In this case, RTI GAP insurance may not be necessary, as it is designed for those who want to replace their car with a brand-new model.
Additionally, RTI GAP insurance has some limitations. It is typically only available for vehicles purchased from a VAT-registered dealer within the last six months to a year. It may also not be suitable for those who do not intend to keep their vehicle for an extended period, as it cannot be transferred to another owner if you sell the car.
Therefore, while RTI GAP insurance can provide valuable protection for those concerned about the depreciation of their vehicle, it may not be worth it for those who only want to replace their car with a similar model. Standard car insurance should provide sufficient coverage in such cases.
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It may be worth it for those who want to replace their car with a brand-new model
Return to Invoice RTI GAP insurance is a popular type of cover that ensures you are protected in the event of a write-off. It covers the gap between what you paid for the vehicle and the insurer's payout. It is worth noting that the finest insurers will only compensate you for the current market value of your car, which could be significantly lower than the price you paid.
RTI GAP insurance may be worth it for those who want to replace their car with a brand-new model. This is because new cars can lose up to 40% of their value in the first year, according to the AA. If you have taken out a loan to buy a new car, your payout from a standard insurance policy might not be enough to clear the debt, leaving you stuck paying for a written-off vehicle. GAP insurance can bridge this gap by covering the difference between the current market value of your car and how much you paid for it.
Vehicle replacement insurance, a type of GAP insurance, will provide you with a payout to replace your car with a brand-new car of the same make, model, and specification, even if the price of the new car has increased since you bought yours. This type of cover can be particularly useful if you want to replace your car with a new model of the same make and model, as it saves you from having to pay the difference if the price of a like-for-like new car has increased.
It is important to note that GAP insurance is a standalone policy and cannot be purchased on the day the car is sold. You need to be at least 18 and the named driver of the car to apply for a GAP insurance policy. While it may not be for everyone, GAP insurance can provide peace of mind and protect you from financial loss in the event of a write-off, especially if you want to replace your car with a brand-new model.
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Frequently asked questions
RTI GAP insurance, or Return to Invoice Guaranteed Asset Protection, covers the difference between what you paid for your car and the insurance payout. It is available for vehicles bought from a VAT-registered dealer within the last six months that are under eight years old and have mileage under 100,000.
RTI GAP insurance is worth considering if you're concerned about not getting the original value of your car back if it's written off by your insurer. It is particularly valuable if your car is on a finance agreement or you have outstanding payments on a personal loan.
You can purchase RTI GAP insurance from online providers or specialist GAP insurers, which often offer more affordable prices and a wider range of GAP products. Some companies that offer RTI GAP insurance include MotorEasy, Direct GAP, and Platinum GAP.
