All About GAP Insurance

lease a car
Guarantee Auto Protection (GAP) Insurance covers the difference of the actual car price and the remaining balance in car financing. Covering the expenses that occur upon theft and/or car damages, it covers both rented and owned vehicles.

Here is an example of how GAP Insurance works:
You purchased a car for £8,000. A year later the car is stolen. If your car is insured, the insurer will reimburse £6,000 from the £8,000. The GAP insurance will pay the remaining £2,000 to the finance company to close the agreement.

gap insurance

When to get GAP Insurance?

• When leasing a vehicle

When you lease a car, you are renting for an extended time with the choice of returning or buying the car at the end of the contract. In case of an accident, you are still liable for the damages or for the replacement of the car. This is why you need GAP insurance.

• When buying a vehicle

The car loses 20% of its value after one year of purchase. You’ll need GAP Insurance to cover negative equity.

• When paying a car loan

If you are paying off a car loan, GAP insurance can shoulder your financial obligations in the event of a total loss.

When not to get GAP Insurance?

• If the car’s worth is more than the car loan.
• If the total loss insurance will exceed the amount of the car loan.
• If there is no need to replace a car after total loss.
• If the car loan is for a short period of time only.

What is not covered by GAP Insurance?

• Continuing payments after unemployment, disability or death
• Repairing your car
• Using the GAP insurance as a down payment for a new car; GAP is not transferable.
• Extending warranties for your car

You should educate yourself on car insurances before buying or leasing a vehicle. If you are planning to lease a car, call ALD Automotive on 087000 111 81 and we will gladly help you with the leasing process.


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