Vehicle Finance GAP Insurance

Vehicle Finance GAP insurance will clear any outstanding debt that you owe to your car finance provider should you write off your car. Because of depreciation and because your car insurer will only cover the current market value of your vehicle, your standard car insurance payout is unlikely to be enough to clear your outstanding finance payments. Vehicle Finance GAP insurance policy would make up this shortfall and pay off your remaining finance.

For example, if you owe £14,000 on your car finance and your car insurance pays out £7,000, your GAP insurer would pay off the remaining £7,000.

If your financed car gets stolen or written off, you should contact your GAP insurer as well as claiming on your standard car insurance. If your main insurer confirms your car is a total loss and pays your claim, then your GAP insurer should also pay out.

As your car insurance claim is unlikely to cover your remaining finance payments, Vehicle Finance GAP insurance will make up the difference and settle your outstanding finance. Remember that this type of GAP insurance will only clear your finance payments; it won’t leave you with a surplus to put towards buying a replacement car.

To compare Vehicle Finance GAP insurance providers and the different elements of their individual policies, you can look at comparison tables. They list the key features of each policy, although it is worth researching further into the exclusions and terms to make sure you get the right cover for you.

To find the best Vehicle Finance GAP insurance policy for your circumstances, you need to consider your vehicle’s specifications, your financial situation, and the terms of your finance deal. This will help you when you come to research the different GAP insurance options, and can help you to find a policy that caters to your needs.

This may depend on the provider. Some providers will require you to purchase Vehicle Finance GAP insurance within a certain number of days of taking out your car finance agreement, while others will allow you to purchase the policy at any point during your finance agreement. In both situations, the insurance will clear any outstanding finance you owe at the time your car is declared a total loss.

If you have carried over any negative equity from a previous car finance agreement, then this may not be covered by a standard Vehicle Finance GAP insurance policy. However, there may be more specialist policies that can offer cover for this situation.