Leasing or securing a PCP deal with a Porsche is a route many drivers decide to take so they can snatch one of their childhood dream cars. A lot of those drivers consider securing Porsche GAP insurance because of the high upfront costs and how quickly they depreciate in the early stages of ownership.
Depreciation hits hard for Porsche owners. It can go unnoticed for a long time, but it can punch you on the nose when you’re already in a challenging situation. If the car is written off or stolen and not recovered, motor insurers pay out at the current market value. This could be significantly lower than the amount you originally paid, or in the case of PCP or leasing, lower than the amount needed to clear the finance agreement.
This could leave you with a financial shortfall. That dream Porsche may not be sitting in the driveway anymore, but you could be left with finance to settle, a lost deposit, or negative equity. GAP insurance is designed to cover that shortfall, depending on the policy terms. This cover could let you get back on the road in another Porsche, rather than leaving you with just the memories in your camera roll.
Differences Between Leasing a Porsche or Choosing a PCP Deal
Leasing and PCP can both make driving a Porsche more accessible. They are both similar, but they are not quite the same thing. The key difference is what happens at the end of the agreement.
Leasing means you are essentially renting the Porsche for an agreed period of time. You will make an initial payment, followed by monthly payments. At the end of the agreement, you will need to hand the car back at the end of the term. There isn’t usually an option to buy the car outright at the end of the deal.
A Personal Contract Purchase (PCP deal) works slightly differently. You will be asked to make a deposit and then make monthly payments for a set period of time. At the end, you normally have three choices: hand the Porsche back, part-exchange it, or pay the optional final payment to own it. That final payment is sometimes called the balloon payment. PCP can offer more flexibility than leasing.
How GAP Insurance Can Help When Leasing a Porsche
If your car is written off or stolen during the lease period, your motor insurance company won’t pay the full amount owed on the vehicle necessary to settle the lease contract. This is where GAP insurance may help cover the financial shortfall.
Let’s say you lease a Porsche with a value of £120,000. After 18 months, the car is written off, and your motor insurer values it at £88,000. However, the leasing company’s settlement figure is £96,000. That leaves an £8,000 shortfall.
How Porsche GAP Insurance Can Help With a PCP Agreement
Putting some numbers on it can help. Let’s say you take out a PCP deal on a Porsche for £120,000 and put down a £10,000 deposit. After 18 months, the car is written off. Your insurer values it at £88,000 because of depreciation.
However, your outstanding finance at that point is still £98,000. That leaves you with a £10,000 gap. Without GAP, you may be forced to plug that shortfall yourself. Or you could be left with the monthly payments and no car. With the right Porsche GAP insurance on PCP, that shortfall could be covered, depending on the policy.
Why Leasing a Porsche or Choosing a PCP Deal Carries More Risk
Porsche models are dream cars for good reason. The brand oozes history and has luxury and performance. It is one of the most desired cars on the road. As a result, Porsche cars usually sit at the higher end of the market. The starting price is usually higher than the average. As a result, just small percentage drops in value can have bigger real-money consequences.
When you combine this with a PCP structure, where your monthly payments do not rapidly reduce the overall balance, it can keep the finance figure above the car’s market value for longer. This situation prompts many drivers to consider GAP insurance on PCP.
When Porsche GAP Insurance on PCP or Leasing is Worth It
Whether GAP Insurance is right for you depends on your own personal circumstances and the car in question. This includes the car’s age, mileage, and model. It depends on your own financial situation and the size of your deposit.
Drivers may be more inclined to consider GAP where there is potential for a large shortfall after a write-off or theft. Examples of situations where drivers sometimes consider Porsche GAP Insurance on PCP or when leasing are:
- The car isn’t “old” and may still lose significant value.
- The deposit on it was small, leading to a long-term PCP agreement.
- The particular model loses value more quickly than others.
- The owners haven’t had the car long, and they want to protect the amount they paid for it if the car is written off quickly.
Drivers should also consider their personal circumstances and ask themselves how they will handle a large, unexpected bill. Drivers who are comfortable covering several thousand pounds at short notice may not feel the need for additional GAP cover. People in that situation may prefer to rely on their own financial safety net.
Limitations to be Aware of With GAP Insurance
To be eligible for GAP insurance, drivers must have comprehensive car insurance. This applies whether you own the car outright, lease it, or have a PCP agreement in place. The person behind the wheel must be the policyholder or a named driver on the comprehensive motor insurance. Any GAP claim depends on your main insurer accepting the write-off first.
There may be limits on how much can be paid out, and certain modifications or usage types can affect eligibility. It’s worth checking who can be covered by GAP and reviewing the policy details before committing. This is even more important for a high-value car like a Porsche.
FAQs about Porsche GAP Insurance on PCP or Lease
We know you might have questions about who GAP insurance covers and who is eligible. The following FAQ section is a clear, no-nonsense breakdown to help you see exactly where you stand and whether you’re covered when it matters most.
Is GAP insurance worth it on PCP for a Porsche
To decide whether GAP insurance is worth it for you, consider your personal circumstances and the type of agreement you have. Some drivers will find Porsche GAP insurance more relevant to them because of the high depreciation and the typically higher costs associated with it.
Can I get GAP insurance after getting my Porsche?
It’s possible to get GAP after receiving your Porsche, but if you want to go down the GAP insurance route, then it’s best to get moving as quickly as possible. Don’t hang around waiting at the lights. Depreciation hits early. The value will drop as soon as you drive the car for the first time.
What does Porsche GAP insurance cover?
If your Porsche is stolen or written off, GAP insurance may help cover some or all of the difference between your motor insurer’s payout and what you originally paid or still owe on finance. This depends on the policy terms.
Expert Insight
“With performance cars like Porsche, the numbers can move quickly. A relatively small percentage drop in value can still translate into a sizeable financial gap. GAP insurance helps make sure that gap does not become your problem if the worst happens.”
Nick, Insurance Specialist at Insureworks.
Wanting to sort Porsche GAP Insurance on PCP?
Getting a quote for Porsche GAP insurance is quick and straightforward with Insureworks. There’s no jargon, and no faff. We will arrange cover quickly. All you need to do is answer a few questions about yourself and the vehicle.