Gap Insurance: What's The Deal?

Combined GAP Insurance is a policy that combines two or more different types of GAP policies into one. GAP stands for Guaranteed Asset Protection, and it is designed to cover the gap between the market value of a car at the time it is declared a total loss and the outstanding finance on its lease agreement. A Combined GAP policy provides multiple levels of cover, ensuring that you receive the maximum payout available and potentially leaving you with money to take out a new lease.

Combined GAP insurance covers the gap between the car's market value and the outstanding finance on your lease

Combined GAP insurance is an optional form of protection that covers the gap between the market value of a car and the outstanding finance on a lease agreement. This type of insurance is designed to protect the value of a car at the time of purchase, in the event that it is stolen or damaged beyond repair. It is called 'Combined' GAP insurance because it combines two or more types of GAP policy into one, such as Lease and Return to Invoice (RTI).

GAP stands for 'Guaranteed Asset Protection', with the asset in this case being your car. If your car is stolen or written off, your motor insurer will offer a settlement sum based on the car's market value at the time of the incident. However, this may not match the original price you paid for the car, leaving you with a significant shortfall. This is where GAP insurance comes in—it ensures that you won't lose out on the difference between what your insurance company offers and what you still owe on your finance deal. This can be very useful in getting you back on your feet financially, especially if you need to buy a new car.

RTI insurance, on the other hand, boosts the settlement sum to match the original price of the car, as stated on the invoice. Combined GAP and RTI insurance will pay out the greater of the two amounts (GAP or RTI), ensuring you are protected no matter the circumstance.

In summary, Combined GAP insurance provides multiple levels of cover, ensuring you get the maximum payout available. This could even leave you with some extra cash to put towards a new lease.

It combines two or more types of GAP policies, such as Lease and Return to Invoice

Combined GAP insurance is an asset protection product that combines two or more types of GAP policies, such as Lease and Return to Invoice (RTI). GAP stands for Guaranteed Asset Protection, and in this case, the asset is your car. This type of insurance is designed to protect your car's value at purchase if it is stolen or damaged beyond repair during the term of your finance agreement.

Lease GAP insurance, also known as Contract Hire GAP Insurance, is a type of GAP insurance that covers leased vehicles. If your leased vehicle is written off, you may be left out of pocket due to the depreciating value of your car and high leasing fees. Lease GAP insurance tops up the insurer's payout in the event of a write-off, providing extra funds to cover the outstanding monthly rental payments and any shortfall in the market value settlement provided by your car insurer. It covers the difference between the payout from your insurer and the value of your vehicle at the time of the incident, as well as settling your outstanding leasing contract and paying off any additional fees.

Return to Invoice (RTI) GAP insurance, on the other hand, boosts the settlement sum to equal the original price of the car as per the invoice. It covers the difference between the insurance settlement figure and the original vehicle price. If your car is written off or stolen, RTI insurance ensures that you receive the same amount you originally agreed to pay for the car, including any deposits.

Combined GAP and RTI insurance provide coverage for both these eventualities and offer the greater of the two payouts—either the GAP between the settlement and what you still owe on your finance agreement or the RTI price, up to the cost of the car. This type of insurance is especially useful if you want the peace of mind of knowing that you will not be left out of pocket in the event your vehicle is written off or stolen.

It provides multiple levels of cover, ensuring the maximum payout available

Combined Guaranteed Asset Protection (GAP) insurance provides multiple levels of cover, ensuring the maximum payout available to customers. This type of insurance is designed to protect customers in a range of circumstances, whether they have paid for their vehicle outright or are still making finance payments.

In the event that a customer's vehicle is written off due to an accident, fire, or theft, their motor insurance company may offer a payout that is less than the vehicle's original value due to depreciation. This can leave the customer facing a financial shortfall. Combined GAP insurance can help bridge this gap by providing two levels of cover: Return to Invoice Cover (RTI) and Guaranteed Asset Protection (GAP).

RTI cover reimburses the difference between the road risk insurance settlement and the original vehicle price. This ensures that the customer is not out of pocket due to depreciation. For example, if a customer paid £26,500 for their car and their motor insurance payout is £14,000, RTI can pay up to the difference of £12,500 to make up the original purchase price.

GAP insurance, on the other hand, is specifically designed for customers with a finance agreement. It pays the difference between the road risk insurance settlement and the amount the customer still owes on their finance agreement. For instance, if a customer financed a vehicle with a purchase price of £26,500 and their motor insurance payout is £14,000, while their outstanding finance payment is £17,500, GAP insurance may payout up to £3,500.

Combined GAP insurance offers the maximum level of protection by providing a payout for the greater of the RTI or GAP amount. This means that, regardless of whether the customer has paid outright or is still making finance payments, they can be confident that they will receive the highest possible payout to cover the cost of their written-off vehicle.

It can be customised to your business needs and designed to suit your customer's requirements

Combined Guaranteed Asset Protection (GAP) insurance can be customised to meet the needs of your business and your customers. This type of insurance is designed to protect customers from financial loss if their vehicle is written off or stolen and their insurance payout doesn't cover the full cost of the vehicle.

For example, if a customer bought a vehicle outright and paid £26,5000, but their insurance payout after an accident is only £14,000, RTI can pay the difference of £12,500 to ensure they receive the full original amount. Combined GAP insurance can also be customised for customers who financed their vehicle. In this case, if a customer paid £26,500 and their insurance payout is £14,000, but their outstanding finance payment was £17,500, Finance GAP insurance may payout up to £3,500.

Combined GAP insurance is flexible and adaptable, ensuring that customers are protected regardless of their circumstances. It can be customised to meet the specific requirements of your business and your customers, providing peace of mind and financial protection in the event of an accident, fire, or theft.

Whether your customers have paid outright or are making finance payments, combined GAP insurance can be tailored to ensure they are fully covered. This type of insurance is particularly useful for customers who have taken out a finance agreement to purchase their vehicle, as it can help them avoid continuing to make payments on a vehicle that has been written off.

It covers the negative effect of depreciation on your vehicle

Combined GAP insurance, or Guaranteed Asset Protection insurance, covers the negative effect of depreciation on your vehicle. This type of insurance is particularly useful if you have financed or leased a vehicle, as depreciation can leave a gap between what you owe and the car's value.

For example, if you finance a new car for $30,000 and have been making payments for a few years, the car's value may have decreased to $20,000. However, you may still owe $25,000 on your loan, resulting in a $5,000 gap. If your vehicle is then involved in an accident and deemed a total loss, your insurance company will only pay out the car's current value, leaving you with a $5,000 shortfall.

This is where Combined GAP insurance comes in. It covers the difference between the depreciated value of the car and the loan amount owed, ensuring that you are not left out of pocket in the event of a total loss. In the above example, Combined GAP insurance would cover the $5,000 gap between the car's value and the outstanding loan amount.

Combined GAP insurance is especially beneficial if you have a long-term loan or lease, a smaller down payment, or a vehicle that depreciates quickly, such as a luxury sedan or an electric vehicle. It protects you from the negative financial consequences of depreciation and ensures that you are not left paying for a vehicle that you can no longer use.

Additionally, Combined GAP insurance can be customised to your specific needs and requirements, providing flexible coverage for your vehicle.

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