Gap Insurance

Gap insurance can cover the difference between the amount you paid for your vehicle, or owe on your vehicle if you have finance, and the amount an insurance company would pay out if the vehicle was written off or stolen.


What is Gap insurance?

GAP is an acronym for Guaranteed Asset Protection. You can think of the asset as your vehicle, but the protection element is a little more complicated and refers to financial cover of the depreciation of your vehicle.

Insurance providers will usually pay the current market value of your car in the event of a ‘total loss/write off’ claim. This can leave motorists out of pocket, especially as new cars typically drop in value between 15% and 35% in the first year and up to 50% or more over three years. GAP insurance covers the difference (or the gap) between the amount your insurance provider pays and the amount you'd need to pay to buy a new or equivalent model.

How does GAP insurance work?

With Gap insurance, types of cover and expenses will vary, this usually will depend on things like whether the pay out is for a new car or to pay existing finance off.

In the event your car is stolen or written off, you will first need to claim on your car insurance, you should always check in with your GAP insurance provider to run your settlement claim past them before accepting. After this you should claim on your GAP insurance as soon as possible, if you have taken GAP Insurance out to cover any finance, you should discuss how the outstanding amount will be settled; i.e automatically covered on your behalf, or a payment to you that you can use to pay off your finance yourself.

What are the different types of GAP insurance available?


Return to Invoice

Return to Value

Contract and Hire

Best for new or used cars bought in the last 6 months.

This type of GAP Insurance covers the difference between your insurer’s payout and either the price you originally paid or the amount needed to settle your outstanding finance balance, whichever is greater.

Best for new or used cars purchased more than 6 months ago or from a private seller.

This type of GAP Insurance covers the difference between your insurer’s payout, based on current value, and the original value based on your GAP insurance start date.

Best for new or used cars purchased on a lease or hire contract agreement where the lease company is the registered keeper.

This type of GAP Insurance covers up to 100% of any outstanding rental payments on a vehicle, as well as any shortfall in finance settlement.

What does GAP Insurance NOT cover?

Always check your policy for full cover details, but most policies will not cover:

  • Non-comprehensive car insurance
  • Driving under the influence
  • Old or well-travelled cars
  • Not named-drivers
  • Business vehicles
  • Non-standard modifications
  • Repairable damage
  • Drivers without a valid license

How much does Gap insurance cost?

Buying gap insurance direct from a dealer will be more expensive, where you can expect to pay anywhere between £500-£1500 for three years cover. The cost depends on the length of your policy and the type of cover you choose. You can expect to pay anywhere between £100-£1500 per annum depending on your vehicle and cover selected. Start a quote to find the best policy suited to you and your vehicle.

Last reviewed: 1 June 2023

Next review: 1 July 2023