Am i being misold gap insurance

[peszy]

I am considering buying a new car and have been bombarded with all kinds of add ons. One is gap insurance to cover the cost if I write the car off and want to replace it with a new one. I understand my comprehensive insurance only covers the book value at the time and gap insurance will make it up. But whilst the dealer is trying to sell it to me I will be taking out a car loan from the bank to cover the finance. Does gap insurance cover bank loan finance as well as hire purchase finance

[Ethel]

Can you clarify please

You are buying one car with a car loan and you will be taking out a bank loan as well to cover the finance? Is that to pay off the finance?

[Panic Button]

I wouldn't bother, they are just trying to make some more profit. It's a bit like being offered super duper shoe spray when you buy a pair of shoes.

If you really want such insurance, I bet an internet search would give a better deal than a car dealer.

[SpikieMikie]

What car is it you're looking at, how old you are and what do you do for work ?

I ask because, like any insurance product, its risk based.

I took out a �15k car plan loan 4 years ago with Payment Protection Insurance, which cost me �45 a month. I recently successfully argued that I had been mis-sold it and the Alliance & Leicester ended up paying me back just short of �3k with interest

[js253]

I speak as someone who has worked in a car dealer for the last ten tears. Not all insurance products are a con to make profit. Like any insurance, it is a risk transfer mechanism. What Guaranteed Asset Protection (GAP for short) is designed to do is make up any shortfall from an insurance policy in a total loss situation (i.e. a write off). Understand that most insurance policies cover trade value at time of claim. As time goes on, the value of the policy will grow, you are effectively covering the depreciation on the car.
Car dealers can/do offer two types of policy.
One will cover the full amount against purchase value.
The second will make any shortfall against a finance agreement.(lesser value), on dealer sold finance.
GAP insurance will cover you any way you decide to pay, either cash or finance/loan.
You may find your current insurer will give you this for your first year, GAP is likely to run for 3 years.
You MUST have fully comprehensive insurance if you wish to take out the policy or wish to finance a car.
Hope this answers your question.