What is GAP Insurance?
A motor insurance policy usually covers your vehicle's market value at the time that it is stolen or written off. This can be a lot less than the amount you purchased the vehicle for.
From the second you first drive your vehicle its value is depreciating. Whether you have paid cash or borrowed the money on a finance or lease agreement, you could be seriously out of pocket.
For example, let's say the original cost of your car was £20,000 and you purchased the vehicle in full, not on a finance agreement. One year later your car is stolen or is in an accident and declared a total loss. The insurance company pays you the market value at the time, which is £10,000. This leaves you £10,000 short of what you paid for the vehicle! GAP Insurance protects this liability.
Don't get caught out... mind the GAP!