GAP Insurance
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Hi all, just had a quick question about the GAP Insurance I have with the finance deal on my KJ. Come February time im going to start looking to move house, to where I can walk to work (as opposed to my current 150 mile round trip - the whole reason I bought the car) and I thought that having £300 less per month going out will help with a mortgage so I'd be looking to sell the KJ (:'(). In Feb I'd imagine it to still be in a little bit of negative equity (I had a decent sized deposit so it'll be probably £1-2k). I read online somewhere that if you trade the car in you can claim on the GAP insurance to cover the negative equity? Does anyone know if this is true?

Thanks.

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Depends what level of cover you have ... it is possible to have negative equity gap insurance but usually only comes in when your trading in and rolling over your finance deal rather than selling outright..best you check with your policy provider to see what the small print says.


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On 16/11/2016 at 8:05 AM, JBeale96 said:

 

Hi all, just had a quick question about the GAP Insurance I have with the finance deal on my KJ. Come February time im going to start looking to move house, to where I can walk to work (as opposed to my current 150 mile round trip - the whole reason I bought the car) and I thought that having £300 less per month going out will help with a mortgage so I'd be looking to sell the KJ (:'(). In Feb I'd imagine it to still be in a little bit of negative equity (I had a decent sized deposit so it'll be probably £1-2k). I read online somewhere that if you trade the car in you can claim on the GAP insurance to cover the negative equity? Does anyone know if this is true?

Thanks.

Sent from my iPhone using Tapatalk

 

No. it's not true.

This:

22 hours ago, 1964 said:

Depends what level of cover you have ... it is possible to have negative equity gap insurance but usually only comes in when your trading in and rolling over your finance deal rather than selling outright..best you check with your policy provider to see what the small print says.


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...is incorrect, sorry.

GAP insurance *only* kicks in if your vehicle has been written off. There are then different types:

Finance GAP insurance: pays the difference between your motor insurance payout and the amount outstanding on finance at the time of claim.

Invoice GAP insurance: pays the difference between your motor insurance payout and the original invoice price you bought the car for.

Replacement GAP: insurance pays the difference between your motor insurance payout and (assuming you bought the car brand new) what it would cost to replace the vehicle with a brand new equivalent at the time of claim.

There are then various combined versions of all of the above.

The Negative Equity cover option for *some* GAP insurance policies refers to how (to my knowledge) all GAP insurance policies will by default exclude cover for the amount of any negative equity that was brought forward from a previous car. Though some policies will allow you to pay an extra premium specifically to cover up to a certain value of Negative Equity brought forward from a previous vehicle.

However, the GAP insurance (even with Negative Equity cover incorporated) will STILL only kick in if your vehicle has been written off through accident, fire, theft or flood etc.

Simply trading the car in or selling it on is absolutely NO cause to get any benefit from any/your GAP insurance policy. 

That said, if you do sell or trade the car in, cancelling the GAP insurance policy (depending where you bought it from) might see you get a pro-rata refund of unused premium (assuming that's not wiped out by any cancellation fees).

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