Creditplus answer your questions on GAP Insurance

Approved by the Car Finance Advisory Board

GUaranteed Asset Protection (GAP) Insurance is a popular product with customers who take out finance and leasing for new and used vehicles. In this section we answer some of most popular questions on GAP Insurance.

When looking into GAP insurance policies you may also want to read more about RTI Insurance. Download the GAP Insurance Key Information Document.

What is GAP Insurance?

Guaranteed Asset Protection (GAP) Insurance covers you for the difference between your comprehensive motor insurance payout and your invoice value or the outstanding finance rentals on your vehicle should the vehicle be written off. We provide a full definition on GAP over at our Car Finance Term pages.

What are the financial benefits of GAP?

GAP Insurance seems like one of those costly and unnecessary expenses that every salesman tries to sell you, until you find out you could have really done with it. Many people are unaware of the savings you could make by simply having GAP Insurance. Listed below are some of the benefits:

  • Financial security on what is, for most, their second biggest asset
  • Helps you get back into the car you love to drive
  • Pays off outstanding finance or lease rentals
  • Helps protect your credit rating
  • Helps negate borrowing to pay the settlement
  • Helps negate the need to borrow to pay off debt

What type of GAP policy should I choose?

The type of GAP insurance you choose will depend on the level of cover you require, but the basic premise for the insurance is the same.

GAP insurance is there to protect you and your finances in the event of your vehicle being stolen or damaged beyond repair. For example, if you were to purchase a car for £12,000 and you're unfortunate enough to write this vehicle off a year into your finance agreement, the insurance company might value your vehicle at £6,000. However, if you still have £7,500 to pay on the finance, you'll still be liable to pay the difference between the outstanding finance and the insurance value of the vehicle. In this example that would be £1,500 that you would personally have to settle with the finance company.

A GAP insurance policy would cover you for this shortfall of £1,500. Please bear in mind that if you're looking for the payment to cover the full invoice price you paid for the car, you'll need to look at Return to Invoice Insurance (RTI Insurance).

What is the difference betweeen GAP and RTI?

Some people get confused between GAP Insurance and RTI Insurance, but these are two different insurance products. As mentioned above, GAP will cover you for the shortfall between the value of your vehicle and the outstanding finance to pay. RTI on the other hand will pay out the difference between the value of the vehicle and the invoice price that you paid for car. This is a great product if you pay in a large deposit as it will ensure that your deposit is returned should the car be stolen or written off. You can find out more about this product in our Car Finance Glossary section.

If you would like to discuss these further, please use our LiveChat function located to the right of the page where we'll be happy to assist you.

Published: 16/05/2016
Last Updated:31/01/2019
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