Gap Insurance for your BMW, and other prestige brands, is often a really good idea as brands such as these are often a target for thieves and joyriders. Vehicle insurance is often higher accordingly on these much sought after models. Buying Gap Insurance would therefore seem a reasonable idea, with a high value car even a reasonable depreciation could level a ‘gap’ of many thousands of pounds should the vehicle be stolen.
So Gap Insurance may be the answer!
Customers are offered Gap Insurance by their BMW dealers, often even modest cover of say £20,000 can cost over £500 for 3 year cover for Return to Invoice Gap Insurance. BMW’s own branded Gap Insurance product is currently underwritten by French insurer AGA, and it must be said that the product does carry a good set of features. Indeed the product is detailed in the Which? Gap Insurance report, and carries a full 5 Star rating by Defaqto. However there may be some features that are missing, that you may find with an online specialist independent brand. For example the BMW product cannot be transferred if your change your vehicle early, provides a shorter 14 day ‘cooling off’ period, cannot be deferred if you have new car replacement with your motor insurance, and you are limited to 4 year cover, not 5.*
There are further potential limitations in terms of what the BMW dealer may offer with their shortfall insurance. The standard Return to Invoice cover may not be the most suitable if you have got a good deal on the vehicle purchase. The more comprehensive VRI Gap Insurance is seldom even offered by your dealer. However, by sourcing your cover online, a similar level of cover can be less than £130, but how can this be?
Gap Insurance is a financial risk to an insurer. However, depending on who the insurer is supplying, may determine the supply price that he can provide.
Consider a BMW dealership, to the Gap Insurer the policies sold will be for high value vehicles, that therefore could depreciate by a higher amount of money than your average Ford Focus. Also, these vehicles are far more desirable to thieves. If a claim is made on one of these policies then the payout is likely to be far higher than average for a gap insurance claim.
So how can you find Gap Insurance for your BMW cheaper?
Gap Insurance policies supplied to an online broker can be viewed slightly differently. The broker can still supply the products to BMW owners, however mixed in with this will be Ford, Vauxhall, Renault and all the other car manufacturers. These vehicles represent insurance risks far lower than the BMW. As Gap Insurance is supplied with ‘across the board’ premium prices, it is reasonable to expect a BMW dealer who sells far fewer policies to customers who represent far higher risk individually to the insurers, to have Gap Policies supplied at a far higher price.
Online brokers supply thousands more policies a year, and the economies of scale mean they can provide far cheaper policies than the dealer. Remember also, the dealer has to charge IPT at 20% and the online broker only 6%.
Buying Gap Insurance for your BMW is far more cost effective online, and this was demonstrated by the Which report into Gap Insurance in early 2012. If you do your homework you can certainly save a significant amount and gain better policy features into the bargain!
*Details taken in December 2013