You may be suprised to learn that there are several ways that you can buy gap insurance in the UK. This is both in the style of guaranteed asset protection and also the method of paying for it. Traditionally, you simply buy a gap insurance product from a motor dealer for a fixed period, typically 3 years, and pay a premium for that full period of cover.
However, have your options changed recently, and why you may consider a change?
How to buy Gap Insurance
If you have bought Gap Insurance in the past, then it is likely that you have bought it from your motor dealer at the time of the vehicle purchase. As we mentioned, the typical motor dealer product is a three year return to invoice style cover, for a fixed premium of around £400.
However, times have changed. With the advent and growth of the internet, there has been a rise in specialist Gap Insurance brokers, who provide a wider range of products than the motor dealer normally, and often at a far cheaper price.
These products are normally directly comparable with the motor dealer products.
There are also a very small number of Gap Insurance brokers who allow you to pay a monthly renewable premium for your gap insurance cover. This may mean you pay say a £10 premium per month for as long as you want the cover (up to a limit).
So which may be best? Well it really depends on how long you are looking to keep the vehicle. The cost effectiveness of each product really depends on this issue. Imagine if you take a 3 year Vehicle Replacement policy from an online broker for a fixed sum of £128. If you opted for a £10 per month premium instead, at month 13 your choice has become less cost effective than buying the full 3 year cover in one fell swoop.
Gap Insurance and a happy medium?
You may want to look at buying a full term policy, whist paying for the policy over a period of time. If you looked to a broker like EasyGap.co.uk, you can pay for your policy (if it is over £100) by interest free instalments. This means you get a full 3 year policy at the most cost effective price, whilst still enjoying the ability to pay over instalments.
There are certainly different ways to approach buying your gap insurance policy when you buy your new car today.