Think twice before buying Gap Insurance from your car dealer

Car Salesman

Buying Gap Insurance direct from your car dealer could cost you £100’s. Worse still, you might end up with the wrong type of policy, or the wrong level of cover.

Car dealerships often have exclusive deals with specific insurers. The dealer will often earn a commission of up to 70% every time a policy is sold. Usually this commission is split between the dealership and the car sales representative who sold the policy. The cost of the commission is then added to the policy.

In other words, if you buy a policy for £300, the car dealer could be making anything up to £210 in commission, meaning the policy itself is worth just £90!

What’s the alternative?

As you’d expect, a better deal can be found online. If you have a price from your dealer then you can use this as a benchmark when getting quotes from other insurers. Make sure you get quotes from as many providers as possible, and don’t just rely on the best-known brands. There are lots of new entrants to the market offering great policies at very competitive prices. See our guide to the Best Gap Insurance providers below, or compare them all in one place now!

Top UK Gap Insurance Providers

There are many different providers of gap insurance in the UK. We’ve listed some of the most popular below in alphabetical order:

  • Five star Defaqto rated policies for new, used and pre-reg vehicles.
  • Excellent customer feedback on Trustpilot
  • Also provides Warranties, Tyre Cover, Keycare, Excess Insurance, Alloy Wheel and Scratch and Dent Insurance
  •  Policies for new and used vehicles, including those on finance.
  • Excellent customer feedback on Trustpilot
  • Trading name of Halo Insurance Services, which also offers Car Hire and Life Insurance.
Motor Easy
  • Cover for most cars purchased from dealerships or private sellers
  • Excellent customer feedback on Trustpilot
  • Provide a range of other products including Warranties, Breakdown cover, Tyre and Alloy Insurance, Cosmetic Insurance and Battery Protection.
Tidy Alloys
  • Provides three types of GAP Insurance, Return To Invoice (RTI), Vehicle Replacement Insurance (VRI) and  Finance/Contract Hire/Leasing GAP with IRP.
  • Excellent customer feedback on Trustpilot
  • Also specialises in Alloy wheel / tyre and cosmetic insurance

What type of Gap Insurance policy do I need?

There are many different types of Gap Insurance. The cover you need will depend on when and how you bought the car.

Return to Invoice (RTI) is the most common form of Gap Insurance. It covers the difference between the amount your car insurer pays and the invoice value of the car when you brought it new. Some RTI policies will also cover any outstanding finance which is still owed at the time of loss.

Vehicle Replacement Insurance is very similar to RTI but covers the cost of a new car of the exact same make and model. It is often sold as an upgrade to RTI and is perfect if you’re looking for a like-for-like replacement in the event of a loss.

Return to Value (RTV) or “Agreed Value” will usually only cover you up to the market value of the car when you took out the Gap policy, not the invoice price you paid. Therefore the pay out is likely to be less than it would be on an RTI policy. However a Return to Value policy may come with a cheaper premium.

Contract/Lease Hire Gap Insurance is specifically designed for private contract/lease hire vehicles. It pays out any outstanding amount owed to the finance company at the time of loss.

When looking for Gap Insurance, it’s important to get the right level of cover. If you purchase the wrong kind of policy then you might find yourself being left out of pocket in the event of a claim. When compare with InsureMyStuff4Less you’ll only see policies which are relevant to your specific needs. Give it a try and get a quote today.