GAP insurance covers the shortfall between what you paid for your car and what your insurer pays out if it’s written off or stolen. The difference exists because of depreciation. Take an example. You buy a car for £30,000. A year later, it’s written off. Your insurer values it at £19,500, leaving you out of pocket by £10,500.
A GAP policy bridges that gap, topping up your insurer’s payout so you’re not left short. Depending on the policy, it could take you back to your invoice price or even give you enough for a replacement vehicle. So, when should I buy GAP insurance?
When’s the best time to buy GAP insurance?
If you’ve bought a brand-new car and have a fully comprehensive insurance policy, you may already be covered for the first year (sometimes even two). In those cases, your insurer may replace the car with a brand-new one if it’s written off in that period, meaning GAP cover isn’t needed straight away.
But not all policies offer this level of protection. If your comprehensive policy only covers market value, or you don’t have comprehensive cover at all, you could be exposed from day one. That’s where GAP makes sense immediately.
It’s especially important for drivers on finance deals. If your car is written off, your insurer won’t pay any interest or charges built into your finance agreement. Some types of GAP policy will, so getting covered early can save you from a nasty surprise.
The general rule? If your car isn’t covered for full invoice replacement in the first year, GAP insurance is worth buying as soon as possible. There may also be pesky deadlines, so don’t leave it lingering on your to-do list for too long.
What about older cars?
GAP isn’t just for brand-new motors. If you’ve bought a nearly new or used car, you can still get cover. Return to Value GAP Insurance is designed for this, protecting the car’s value on the day you bought the policy and covering any future depreciation.
Most providers recommend GAP insurance for cars under seven years old. Beyond that, depreciation tends to level off, so the payout difference isn’t usually as painful. You can get cover for older cars, but it’s less essential than for new or nearly new models.
How to get GAP insurance
Dealerships love to add GAP onto the finance paperwork, but that convenience often comes at a higher price. You’ll usually find better deals through Insureworks, where you can pick the policy type that fits your situation and budget. Our online tools mean you can get signed up in minutes and, if you ever need to claim on insurance, the process is just as quick.
Before buying, make sure you check:
- Whether your comprehensive insurance already gives you new-for-old cover (and for how long)
- The policy length, so it lines up with how long you’ll keep the car
- Any exclusions for mileage, age, or car condition
- Whether the cover includes finance charges and fees
The takeaway
The best time to buy GAP insurance depends on how your car is insured from the start. If your comprehensive policy already covers you for a full replacement in the first year, you can hold off until that runs out. But if it doesn’t, or if you’re financing a car, it makes sense to get GAP insurance right away.
Want to check your options? Head over to our Advice Centre for more guides on GAP cover, or start your quick quote with us today.