Gap insurance

[hazelb]

Just bought a new car for 13K cash the salesman is trying to sell me Gap Insurance do it need to purchase the extra insurance?

[Buenchico]

People who only put down a low deposit on a car might need gap insurance.

People who put down a substantial deposit on a car probably don't need gap insurance.

People who pay cash (as you say you've done) NEVER need gap insurance!

[wilkesneil]

gap insurance covers the shortfall that may occur in instances that the car is wrote off in a smash, as you've paid cash there would be no shortfall on the money paid to the finance company.

[pretty_snowdrop]

Look closely at your existing insurance details. Some will replace your car with a brand new one (same model of course) if you write it off within 12 months. So you will have no need for gap insurance.

[wilkesneil]

easy way to look is in 6 months you're cars wrote off (imagine on finance) and the insurance pay £9.500, this leaves you short of £3,500... this is what the gap will cover (the £3,500 shortfall) but has you've paid cash there is nothing really to be gained by having gap insurance.

[mrs.chappie]

Ah, now I do know a little about this, having looked it up today.There are two types of GAP insurance - Return to Invoice and Vehicle Replacement.

It might be worth you looking them up on t'internet, even if you decide you don't want it.

[wilkesneil]

vehicle replacement works the same as the return to invoice which i've tried to explain.
check this site as it will explain in pictures also how it works.

http://www.gapinsuran...ent-gap-insurance.asp

[mrs.chappie]

RTI will give you price you paid for the car (ie the invoice price) - but Vehicle Replacement gives you the cost of replacing the car. If you'd had the car, for example, a couple of years before it was written off, the cost of replacing it would have gone up.