'Invoice cover' when buying new car - worthwhile?
24 April 2006, 05:54 PM
#1
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'Invoice cover' when buying new car - worthwhile?
Hi all
Having decided to change my scooby for something more sensible (
), I've been offered an insurance policy by the dealer supplying my new car which I'm in two minds about.
Basically, for a one-off premium of £449 for 3 years, the policy will make up the difference between the insurance payout if my car is written off, and the original amount I paid for it. So, suppose it's written off for some reason in 2 1/2 years' time and I get a payout of £14k from my insurance company (being the trade value of the car at that time), the extra policy will pay out an additional £8500 to make it up to the original purchase price of the car (£22500).
So, it covers not only the difference between the insurance payout and what the car would really cost to replace, but also the depreciation since I originally bought the car. Clearly if I'm expecting the car to be written off in the next 3 years then it's a no-brainer.
Any suggestions as to whether I should take out this cover or not?
Having decided to change my scooby for something more sensible (
), I've been offered an insurance policy by the dealer supplying my new car which I'm in two minds about.Basically, for a one-off premium of £449 for 3 years, the policy will make up the difference between the insurance payout if my car is written off, and the original amount I paid for it. So, suppose it's written off for some reason in 2 1/2 years' time and I get a payout of £14k from my insurance company (being the trade value of the car at that time), the extra policy will pay out an additional £8500 to make it up to the original purchase price of the car (£22500).
So, it covers not only the difference between the insurance payout and what the car would really cost to replace, but also the depreciation since I originally bought the car. Clearly if I'm expecting the car to be written off in the next 3 years then it's a no-brainer.
Any suggestions as to whether I should take out this cover or not?
24 April 2006, 06:05 PM
#3
This is GAP insurance. As with any insurance policy it is a risk scenario, as regards to you actually taking the risk on whether it is worth it or not to you. Personally I have been offered this before, but never taken it out.
24 April 2006, 06:10 PM
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I came across this RTI (return to invoice) policy yesterday when talking to a dealer. I was told approx. £300 for 3 years.
Did some research via google & found this site - haven't read the full details but looks like you can arrange this yourself for a lot less than dealer mark-up
<http://www.firstcar.co.uk/services/gapinsurance.asp?utm_source=overture&utm_medium=pp c&utm_content=gap+insurance&utm_campaign=GAP+Insur ance+Overture>
Den
Did some research via google & found this site - haven't read the full details but looks like you can arrange this yourself for a lot less than dealer mark-up
<http://www.firstcar.co.uk/services/gapinsurance.asp?utm_source=overture&utm_medium=pp c&utm_content=gap+insurance&utm_campaign=GAP+Insur ance+Overture>
Den
24 April 2006, 07:01 PM
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...and yet again, it's SN to the rescue. 3 years premium with a claim limit of £15k (which should be plenty) is £209 - less than half the dealer price. No wonder they were so keen to remind me in advance of picking the car up 
In fact, I might just take it up - I always thought gap insurance was just to cover the difference between the payout and the actual value of the car, to save hassle beating the insurance company into making a fair offer. Didn't realise it could cover depreciation as well - and as I'm buying from a main dealer to begin with, that'll be significant...
Cheers guys
Andy
In fact, I might just take it up - I always thought gap insurance was just to cover the difference between the payout and the actual value of the car, to save hassle beating the insurance company into making a fair offer. Didn't realise it could cover depreciation as well - and as I'm buying from a main dealer to begin with, that'll be significant...
Cheers guys
Andy
24 April 2006, 07:08 PM
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I have this for my car with the RAC, covered for 3 yrs and if the unthinkable does happen it covers the gap between my insurance payout (which is equal to the car's current MARKET value, which is always less) and what I paid for the car. So as quite rightly said if it does become messy I get a new car up to the value I paid for mine (14995) so well happy.
24 April 2006, 07:19 PM
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Just spotted... none of the b*stards will pay out for a modified car! 
It's standard right now, but what do you guys reckon are the chances that I'll be happy not to chip my new 330d, having come from 6 years' scooby ownership?
Edit: correction, the Norwich Union policy at https://www.surfandprotect.com DOES cover modified cars - at least, it doesn't specifically exclude them...
It's standard right now, but what do you guys reckon are the chances that I'll be happy not to chip my new 330d, having come from 6 years' scooby ownership?
Edit: correction, the Norwich Union policy at https://www.surfandprotect.com DOES cover modified cars - at least, it doesn't specifically exclude them...
Last edited by AndyC_772; 24 April 2006 at 07:29 PM.
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24 April 2006, 08:05 PM
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Originally Posted by AndyC_772
Hi all
Having decided to change my scooby for something more sensible ( ), I've been offered an insurance policy by the dealer supplying my new car which I'm in two minds about.
Basically, for a one-off premium of £449 for 3 years, the policy will make up the difference between the insurance payout if my car is written off, and the original amount I paid for it. So, suppose it's written off for some reason in 2 1/2 years' time and I get a payout of £14k from my insurance company (being the trade value of the car at that time), the extra policy will pay out an additional £8500 to make it up to the original purchase price of the car (£22500).
So, it covers not only the difference between the insurance payout and what the car would really cost to replace, but also the depreciation since I originally bought the car. Clearly if I'm expecting the car to be written off in the next 3 years then it's a no-brainer.
Any suggestions as to whether I should take out this cover or not?
Having decided to change my scooby for something more sensible (
), I've been offered an insurance policy by the dealer supplying my new car which I'm in two minds about.Basically, for a one-off premium of £449 for 3 years, the policy will make up the difference between the insurance payout if my car is written off, and the original amount I paid for it. So, suppose it's written off for some reason in 2 1/2 years' time and I get a payout of £14k from my insurance company (being the trade value of the car at that time), the extra policy will pay out an additional £8500 to make it up to the original purchase price of the car (£22500).
So, it covers not only the difference between the insurance payout and what the car would really cost to replace, but also the depreciation since I originally bought the car. Clearly if I'm expecting the car to be written off in the next 3 years then it's a no-brainer.
Any suggestions as to whether I should take out this cover or not?
! It costs them **** all in the scheme of things and salesman get good commission on extras
.
24 April 2006, 08:45 PM
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You're probably right there, but I did beat the salesman down to the point where he wouldn't even throw in a free BMW T-shirt - so I doubt that was ever going to happen!
24 April 2006, 08:54 PM
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I bought an RB5 approx 3 1/2 years ago from Osbornes in Colchester, cost was about £17k.
Wrote it off almost a year later... Tescos paid out £15k on my insurance policy and the gap policy that i took out with the dealer ( think it cost me £250 for 3 years cover ), made up the difference.
The only drawback was that the £2k had to used in the dealership that it was purchased from... not a major hassle as this was then used to help purchase the P1!!!!!!!!!
Well worth the extra cost...
Mike
Wrote it off almost a year later... Tescos paid out £15k on my insurance policy and the gap policy that i took out with the dealer ( think it cost me £250 for 3 years cover ), made up the difference.
The only drawback was that the £2k had to used in the dealership that it was purchased from... not a major hassle as this was then used to help purchase the P1!!!!!!!!!
Well worth the extra cost...
Mike
24 April 2006, 09:15 PM
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Sounds like your insurance company made you a pretty good offer there, for a £17k (dealer price) car to only have depreciated to £15k in a year is exceptional. I'd have expected a £15k payout if you'd destroyed the car on the way home from the dealership!
I certainly wouldn't take out a policy that had to be used at the same dealer, though. If I've learned one thing about buying cars, it's not to be too fussy about where you go to buy them. Believe it or not, my 330d was the only one I could find with the right spec anywhere in the country ;(
I certainly wouldn't take out a policy that had to be used at the same dealer, though. If I've learned one thing about buying cars, it's not to be too fussy about where you go to buy them. Believe it or not, my 330d was the only one I could find with the right spec anywhere in the country ;(
24 April 2006, 10:38 PM
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Originally Posted by AndyC_772
Hi all
Having decided to change my scooby for something more sensible ( ), I've been offered an insurance policy by the dealer supplying my new car which I'm in two minds about.
Basically, for a one-off premium of £449 for 3 years, the policy will make up the difference between the insurance payout if my car is written off, and the original amount I paid for it. So, suppose it's written off for some reason in 2 1/2 years' time and I get a payout of £14k from my insurance company (being the trade value of the car at that time), the extra policy will pay out an additional £8500 to make it up to the original purchase price of the car (£22500).
So, it covers not only the difference between the insurance payout and what the car would really cost to replace, but also the depreciation since I originally bought the car. Clearly if I'm expecting the car to be written off in the next 3 years then it's a no-brainer.
Any suggestions as to whether I should take out this cover or not?
Having decided to change my scooby for something more sensible (
), I've been offered an insurance policy by the dealer supplying my new car which I'm in two minds about.Basically, for a one-off premium of £449 for 3 years, the policy will make up the difference between the insurance payout if my car is written off, and the original amount I paid for it. So, suppose it's written off for some reason in 2 1/2 years' time and I get a payout of £14k from my insurance company (being the trade value of the car at that time), the extra policy will pay out an additional £8500 to make it up to the original purchase price of the car (£22500).
So, it covers not only the difference between the insurance payout and what the car would really cost to replace, but also the depreciation since I originally bought the car. Clearly if I'm expecting the car to be written off in the next 3 years then it's a no-brainer.
Any suggestions as to whether I should take out this cover or not?
Hi Andy,
Gap insurance just pays the difference (or Shortfall) between the market price as offered by the insurance company (if you had to claim of course) and the balance outstanding on finance.
It does not just give you the full purchase price.
New Vehicle , definitely take it out
Used Vehicle, do the sums as depreciation will have already gone,
In any case, normally it's just one extra payment so for peice of mind probably worth it.
Ta Ta
Richard
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24 April 2006, 10:51 PM
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It depends which kind of policy you go for. Take a look at the surfandprotect site - they do three kinds of policy:
- finance GAP, which pays out just enough to clear any outstanding finance, but no more
- invoice GAP, which actually does pay out the difference between the insurance settlement and the price paid by the policyholder for the car, whether the car is bought new or used. This is what I'm looking at.
- replacement GAP, which guarantees a brand new replacement car and is therefore the most comprehensive, but is only available at the time of purchase if buying a car brand new.
Fortunately it also turns out that I don't have to buy on the same day I collect the car, but within 90 days or so. Time to shift the scooby and let my savings account recover a bit... but hopefully not wreck the new motor!
- finance GAP, which pays out just enough to clear any outstanding finance, but no more
- invoice GAP, which actually does pay out the difference between the insurance settlement and the price paid by the policyholder for the car, whether the car is bought new or used. This is what I'm looking at.
- replacement GAP, which guarantees a brand new replacement car and is therefore the most comprehensive, but is only available at the time of purchase if buying a car brand new.
Fortunately it also turns out that I don't have to buy on the same day I collect the car, but within 90 days or so. Time to shift the scooby and let my savings account recover a bit... but hopefully not wreck the new motor!
25 April 2006, 09:37 AM
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I think they cover themselfs against dangerous or reckless driving, so if you were deemed by the police to have caused the accident and get prosicuted then they wont pay out.
Simon
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