I completely agree with what you have said. Its obvious you know what GAP is.
Originally Posted by Matt197
Yes I don't like GAP(mainly what is sold at dealers the online stuff seems better) but what bothers me much more is a lot of people buy into the "what are you going to do when you car gets written off?" comments. These situations never arise. Well unless you pay over the odds and your finance is at 20% APR. Carcraft springs to mind. Also I have heard people say "I never want to use it" or "I will be glad if I never use it!" Are these people nuts? If you have it you want to use it cos it can make you £1000s better off.
Yes you are right that gap could top you up to get a new car but if I have my car on a PCP and I would estimate I will always have at least £1k equity so I could still put that down for a new car on a PCP again.
Also what bothers me is people seem to think having gap means it does not matter what you take from your standard policy. GAP only covers book to purchase price. So take a crap offer and you still won't get purchase price back in total. So someone like me who will argue with the motor insurers may still be better off considering I dint shell out £300-400 in the first place. (admitedly this depends on when the car gets written off)
Another thing that really shows dealer GAP policies for the rip off they are is I am on a 2 year PCP but the dealer only offered a 3 year policy of which most people would only need the 2nd year due to most insurers doing new for old in the first year anyway. So that is then effectively £400 for 1 years cover. Would the pro gap people consider that "a no brainer"??
I work in the finance industry and have studied FSMA 2000 and I really think that the GAP days are numbered. PPI has been pulled because of a lot of bad press and miss selling and I think gap could go the same way. I have bought about a dozen cars from dealers and gap is always offered but they never seem to ask my average ownership length(approx 10months at the mo) and if my motor policy covers new for old in the first year? They just say "what will you do WHEN your insurers payout less than the car is worth?
I would call that miss selling!!
Wheel and tyre Insurance
These all give dealer enormous profit, much bigger than the car does. And all you should say NO to.
If you must have GAP, please understand what it is and what situation you would be in if the car does go south and the please buy it online for a 3rd of the cost. Then hope the car gets nicked 1 day before the cover ends. I do mean hope, no fraud please!!
Thats a really interesting one.
Originally Posted by Woody
Are you paying more to insure the mods or is it just part of the policy??
I will say though. not a snowball in hells chance you will get more than a total of £17k.
yes I pay alot more to insure value of mods.
wheel and tyre cover cost me nothing but it was cus of a dropped ball (thats another story) I think it was 250 quid . .. . .. i had 4 brand new contis fitted due to side wall damage . . . . tracks ha ha ha. but they paid out well in excess of £500 plus i had a wheel refurb done on 2 of my old wheels shud have been £65 a time i payed nothing.
paint protection I have had no dealings as i saw that as a rip off.^^^^^^^^^^ deffo reccomend wheel and tyre though
Did you see what I said later?
Originally Posted by dmc_74
I would never advocate insurance fraud!!
But esentially thats part of the reason I don't understand why gap exists. Its best if it pays out!! Normal insurance isn't because it leaves you the same as before but gap can leave you considerably better off.
Just assume you have it up of sale for £10 but some nicks it, you would get what £15500 instead?? I'm so supprised there is not loads of fraud with this product.
working with the police, we get this kind of thing all the time trust me. ppl report there car stolen and hide it 5 miles away. . . . ..
I wasn't arguing for the ethics of GAP insurance, nor for peoples unscrupulous attitudes to ripping insurers off. I was merely saying that along with ALL other forms of insurance that IMHO your better off with it, than without.
I agree that dealerships do essentially bum you with the price, but they bum you with everything else to, so why should this be different? They are business out to make money.
Surely by definition you will, no matter how bad the deal is.
Originally Posted by PB.200
Fair point, but you show me somewhere where I can buy a good deferred GAP policy, and I'll buy it.
Originally Posted by PB.200
What are you basing this on? Seems quite unrealistic to me. And even if your correct, how much is your deposit amount currently? If its more than £1k, you've lost the difference.
Originally Posted by PB.200
Obvously it depends on the deal you got. Mine was rather good so I know I should always have equity.
Originally Posted by varlski_uk
Back to the point about the actual payment.
Lets say you bought your car for £16k and your car swritten off when it books at £10k but your insurance makes an offer at £8k so you think fine my gap will cover the difference to purchase price anyway. Well you will be in for a shock as the gap will only pay £6k not £8k.
If you were in charge of the gap claims department would you pay an extra £2k that you shouldn't have to because your customer took a silly offer from their motor policy.
Guys (and Gals?) I work for an online GAP Insurance provider. No doubt the forum rules prevent me from revealing who, so I'm not going to do so.
Originally Posted by Maz
Nevertheless, I've been alerted to this conversation and having read through all of the posts, there is clearly some confusion about what GAP Insurance is and how it works.
I wanted to take the opportunity to try to clarify matters and hope it will be taken in the good nature that it's intended.
There are now four types of GAP Insurance available in the UK. How they differ is dependant on which "Gap" the policy is intended to cover:
- Finance GAP Insurance - Covering the difference between the motor insurance payout and the amount outstanding on finance at the time of loss.
- Retail Value GAP Insurance - Covering the difference between the motor insurance payout and what was the Retail Value (according to a guide such as Glass' Guide or Parkers - depending on the supplier) of the vehicle when you bought the Retail Value GAP Insurance policy.
- Invoice GAP Insurance - Covering the difference between the motor insurance payout and the original price the vehicle was purchased for.
- Replacement GAP Insurance - Covering the difference between the motor insurance payout and the cost of replacing the vehicle new-for-old at the time of loss.
Other than via motor dealers, "Finance GAP Insurance" is now rarely sold.
Consider... the potential risk to a "Finance Buyer" is almost always decreasing... after all, each month a repayment is made towards the finance agreement and the amount outstanding reduces... this means that the goal posts are constantly moving (shrinking) and (generally) the more time that goes by without a claim, the more will have been paid off the finance, therefore the smaller the potential GAP Insurance payout will be.
In summary, Finance GAP Insurance is a decreasing level of cover.
On the flip side, Invoice GAP Insurance, effectively fixes the original purchase price as the start point... the more time that goes by without a claim, the more the vehicle will have depreciated, therefore the larger the potential gap would be.
In summary, Invoice GAP Insurance is an increasing level of cover.
This being the case, a cash buyer is almost always at a greater potential of financial loss than a finance buyer and subsequently is usually far better suited to buying GAP Insurance. Further, with few exceptions (see below) a finance buyer is usually better suited to purchasing Invoice or Replacement GAP Insurance than Finance Gap Insurance, on the basis that an Invoice or Replacement GAP Insurance policy would usually leave them with money left over, after having settled the remaining finance (if applicable), to put towards the cost of replacing the vehicle - as opposed to Finance GAP Insurance which at best would leave them at zero... (e.g. no car, but no debt either)
The only time that a Finance Buyer would be better suited to buying GAP Insurance than a cash buyer, is if no or little deposit was put down and/or the interest rate of the finance agreement was particularly high, in which case the finance agreement settlement figure in the early part of the loan could well be higher than the original purchase price of the vehicle.
However, to counter this, you'll now find that many companies offer a combined Invoice + Finance GAP Insurance policy which, in the event of a Total Loss, will pay the difference between the motor insurance payout and the GREATER of either, the finance agreement settlement figure OR the original vehicle purchase price - giving the best of both cover types in one policy.
Specifically in answer to the OP's question the difference between the policies supplied by motor dealers and those supplied by the various online companies usually come down to:
Motor dealers charge considerably more because they can. But, most people in their position would do the same. Unfortunately most people still don't know what GAP Insurance is and usually the first time someone hears about it is from the motor dealer, who in turn will normally give the impression that it's a "right-here-right-now" kinda deal and can't be equalled by anybody else (I constantly hear stories about how motor dealers have described nightmare scenarios of other companies not paying out). Regretfully, most people still either fall for it, or simply can't be bothered to look elsewhere, or don't realise they can and therefore the motor dealer effectively has a captive market and can get away with such absurd prices. That being said, they do have much larger overheads than us online providers and are therefore somewhat justified in charging a higher price.
I hope this helps.
I apologise for stepping on anyone's toes. I mean not to cause offence.
^^^ no mate every thing helps