Rti Gap Insurance: What You Need To Know

Return to Invoice (RTI) Gap insurance covers the difference between the total loss value of a vehicle and its original purchase price if it is stolen or written off in an accident. RTI Gap insurance is particularly popular among car finance customers as it protects them from having to pay monthly instalments for a car they can no longer drive. This type of insurance is best suited to those who own their car outright or financed their car purchase using a personal loan.

RTI Gap insurance covers the difference between the vehicle's total loss value and its original purchase price

Return to Invoice (RTI) Gap Insurance is an optional add-on to your car insurance policy that covers the difference between the insured declared value of your car and its invoice value. This means that in the event of a total loss, RTI Gap Insurance will pay the difference between the comprehensive insurer's market value settlement and the original vehicle invoice price or the finance settlement figure, whichever is higher. This can be particularly useful if you have a new car, live in an area prone to theft or natural disasters, or want to protect your car's original invoice value.

RTI Gap Insurance typically covers vehicles for up to three to five years from the date of purchase. It is important to note that this type of insurance only covers total loss and theft, and not minor damages. Additionally, it is only available for vehicles that are owned outright or financed through a Hire Purchase (HP) or Personal Contract Purchase (PCP) agreement. The vehicle must also be purchased from a VAT-registered dealer and meet certain age and mileage requirements, which can vary depending on the insurance provider.

The cost of RTI Gap Insurance is usually around 10% more than a regular comprehensive car insurance policy. This additional coverage ensures that you receive the original purchase price of your vehicle in the event of a total loss or theft, rather than just the insured declared value, which takes into account depreciation and market fluctuations.

When considering RTI Gap Insurance, it is important to carefully review the terms and conditions of the policy, as well as your own personal circumstances, to determine if it is the right choice for you.

It is popular among car finance customers as it protects them from paying instalments for a car they can no longer drive

Return to Invoice (RTI) Gap insurance is a type of insurance that covers the difference between the total loss value of a vehicle and its original purchase price in the event of theft or a write-off. RTI Gap insurance is especially popular among car finance customers as it protects them from having to pay instalments for a car they can no longer drive.

When a brand-new car is written off, a standard insurance policy will only cover the value of the car at the time of the accident, leaving the driver unable to claim back the original purchase price of the vehicle. As a brand-new car can depreciate by 15-35% in its first year, this could leave the driver with a shortfall of thousands, and stuck paying a loan for a car they can no longer use.

With RTI Gap insurance, the driver is protected as the shortfall between their insurance payout and the price they originally paid for the vehicle is covered. This means that if their vehicle is written off, they can pay off any outstanding finance and settle their agreement early, and put remaining funds towards their next car.

For example, imagine a driver has a 36-month finance agreement for a brand-new car. The purchase price of the vehicle is £26,000, and the total amount payable with interest is £29,510. After one year, they have repaid £9,840, but their car is written off in an accident. The car has depreciated by 35% and their insurance provider will only pay out the car's current market value of £16,900. Without RTI Gap insurance, they would be left with a shortfall of £2,770. However, with RTI Gap insurance, they could claim back the original price on the invoice (£26,000). This would enable them to settle their outstanding finance of £19,670 and use the remaining £6,330 towards their next car.

RTI Gap insurance not only gives drivers peace of mind but could also save them thousands if their car is written off or stolen.

It is also known as Back to Invoice or Retail Price Protection

Return to Invoice (RTI) Gap Insurance, also known as Back to Invoice or Retail Price Protection, is a type of insurance policy that covers the difference between the insurer's settlement and the original invoice price of the vehicle. This type of insurance is particularly useful if your vehicle is written off through an accident, fire, theft, or flood damage, as standard motor insurance policies typically only pay out the depreciated or 'market' value of the vehicle at the time of the claim.

Back to Invoice GAP Insurance ensures that you receive the original invoice price of the vehicle, regardless of its depreciated value. This can be especially beneficial if you have financed the vehicle through a loan or lease agreement, as it can help clear any outstanding balance and prevent you from being left with a financial burden.

For example, let's say you purchased a car with an invoice value of £20,000, and unfortunately, it gets written off in an accident. At the time of the claim, you still owe £21,000 to the finance company. A standard comprehensive market value insurance payout might only be £15,000, which is the second-hand value of the car at the time. However, with Back to Invoice GAP Insurance, you would receive a payout of £6,000 on top of the market value insurance payout, resulting in a total of £21,000. This ensures that you can settle the finance and avoid any remaining debt.

Back to Invoice GAP Insurance is suitable for those who want to ensure they are covered for the full financial cost of losing their vehicle. It defuses the time bomb of motor depreciation, ensuring that you receive the original invoice price regardless of how much the vehicle has depreciated since purchase.

To qualify for this type of insurance, certain criteria must be met. For instance, the vehicle must be new or less than ten years old, owned outright, or subject to a finance agreement, and purchased from a VAT-registered dealer.

It is available to individuals and businesses

RTI Gap Insurance, or Return to Invoice GAP Insurance, is available to both individuals and businesses. It is a type of insurance that covers the difference between the current market value of a vehicle and the original invoice price. This type of insurance is particularly useful for those who have financed their vehicle through a loan or lease, as it can help cover any remaining payments owed even after the vehicle has been written off or stolen.

RTI Gap Insurance is not a legal requirement in the UK, but it can provide valuable peace of mind for drivers. In the event of a total loss, RTI Gap Insurance will ensure that the policyholder receives the full amount they paid for their vehicle, rather than just the depreciated market value. This can be especially beneficial for those who prefer to drive new cars, as it allows them to replace their vehicle with one of equal value.

While RTI Gap Insurance is available to both individuals and businesses, there are some eligibility requirements that must be met. For example, the vehicle must be less than 10 years old and must have been owned for less than 180 days or 365 days if it is covered by a new car replacement policy. Additionally, the vehicle must be owned outright or on a hire purchase or personal contract purchase agreement. It is important to note that RTI Gap Insurance is not available for commercial vehicles over 3500 kg, motorcycles, or mopeds.

Overall, RTI Gap Insurance can be a valuable tool for individuals and businesses looking to protect their investment in a vehicle. By providing coverage for the difference between the market value and the original invoice price, RTI Gap Insurance can help ensure that policyholders can replace their vehicle with one of similar value in the event of a total loss.

It covers all drivers who are legally allowed to drive your vehicle

Return to Invoice (RTI) GAP Insurance is a type of cover that offers drivers a way of getting more money returned when their vehicle is written off. If your car is stolen or written off, standard car insurance will only pay out the vehicle's value on the current market. As a car's value depreciates rapidly, the amount you receive may be far less than the original price you paid for it. This is where RTI GAP Insurance comes in. It covers all drivers who are legally allowed to drive your vehicle.

RTI GAP Insurance will top up the difference between how much your insurer pays out in the event of a write-off and the net invoice price you originally paid for your vehicle, or your outstanding finance or leasing fees, whichever is greater. This means that if you have RTI GAP Insurance and your car is written off, you will receive the full amount you paid on your car's invoice back when you bought it. This can be extremely useful if you want to buy a new car as a replacement, as it will allow you to purchase a car of equal value to your write-off.

For example, let's say you buy a £30,000 car using a bank loan. Two years later, your car is deemed a 'total loss' by your motor insurer after a collision. Due to depreciation, your car is now only worth £20,000 and your motor insurer agrees to pay you this amount as a settlement. In this scenario, your RTI GAP Insurance policy will pay the difference between what your motor insurer pays you (£20,000) and what you originally paid for the vehicle (£30,000), which is £10,000. This will help you to buy a replacement car of a similar specification to the one that was written off.

RTI GAP Insurance is best suited to those who own their car outright or financed their car purchase using a personal loan. It is also a good option for those who prefer brand new cars, as it allows them to purchase a new car of equal value to the one that was written off. Additionally, RTI GAP Insurance can be beneficial for car owners who have not finished making repayments on their vehicle. If your vehicle is written off and you only have standard car insurance, you will still need to continue making monthly payments even though you no longer have use of the car. However, with RTI GAP Insurance, you will be able to settle any remaining payments.

Frequently asked questions