Asset Protection Insurance

[grandem]

I am purchasing a new car soon and I have been offered "Asset Protection Insurance " this makes up the difference between the purchase price and the amount the main insurance offers if the car is written off in an accident within 3 years. Is it worth the high cost which is nearly double the main insurance ??

[Rowland2094]

Asset Protection? Who knows what you will be offfered if your car is written off? Who has made a statement that this offer will actually be made? Within 3 years the second hand market could have changed so much etc., etc., I would think that this is only worth having if the offer is gauranteed (with no weasel words) and you think your can will devalue substantially. Oterwise think again

[ABerrant]

Guaranteed Asset Protection (GAP) is cover for any shortfall in payment when a total loss pays out a depreciated value for a vehicle.

Various different types of GAP exist, such as Return to Invoice Insurance (RTI), Back to Invoice Insurance, Finance Gap Insurance, Vehicle Replacement Insurance (VRI), Total Loss Gap, and Shortfall Cover. They do not necessarily offer the same type of cover and the Ts&Cs should be scrutinised.

Is it worth it? All insurance is a gamble and it is for you to decide whether to cover yourself for the worst case scenario i.e. the point when depreciation is at its worst.

If you write-off your car within days of purchase and the depreciation is less than the premium for the GAP, then you lose out.

If at a later date the car is written-off and the depreciation is something like 5x, 6x ,7x,..., 10x the premium, then you are a winner (so to speak).

The choice is yours (but again I reiterate the need to ensure you check and understand the level of cover).