What Is GAP Insurance
GAP Insurance is all about Peace of Mind. If your vehicle is written off or stolen whilst still paying off your finance, your car insurance may not be able to offer you the amount you still owe on the vehicle and be able to replace your vehicle. GAP or Guaranteed Asset Protection is designed to cover that financial gap.
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On average, an incredible 60% of new cars lose their value within the first 3 years. It is this depreciation in value that makes it unlikely that the payout from your insurer would be as much as what you paid for the car.
If you have existing finance on the car, you risk having to repay more than the amount the car has been valued at by your insurer if:
Your deposit for your finance agreement was small
You're paying your finance balance off slowly
If your financial agreement has a big 'optional final payment
GAP insurance gives you the reassurance that if your vehicle is written off or stolen, you won't be owing any money on a vehicle you no longer have.