If you’re leasing a new van GAP insurance is well worth considering.
What is meant by GAP?
GAP stands for Guaranteed Asset Protection. This has nothing to do with the value of the vehicle.
You are insuring the difference in amount the insurance company will pay out if your new van is stolen or written off and what the finance company, which funded your new car, will expect to be paid to settle the outstanding finance.
Put another way, it is the difference between the insurance company pay out amount and the settlement figure from the finance company.
For example, you get a new van and three days later it is stolen and never recovered. Let’s say the insurance company will pay £10,000, but the finance company say the settlement figure is £15,000. Again this is nothing to do with the value of the vehicle. So you have to pay the finance company £15,000, but your insurance will only pay out £10,000, so you would need to find the balance of £5,000.
GAP insurance covers you for this eventuality. The cost of GAP insurance is typically around £200 for the term of the lease and is payable at the start of the lease. And the good news is that there is the option to pay in monthly instalments by direct debit.
Another benefit of GAP insurance is that it will also pay up to £250 of your motor insurance excess in the event of a fault claim.
If you’ve any further questions on GAP insurance, just ask our expert team