It is estimated that your brand new car loses as much as 10% of its value the minute you drive it away from the dealer’s forecourt. As the proud owner of your new vehicle you want to do anything you can to protect your asset. In addition to the depreciation problem, accidents can happen – your new purchase could be damaged or worse still written off or stolen – and in all likelihood it wasn’t even your fault. For these reasons it is advisable to purchase Gap Insurance to protect your investment.

Gap insurance covers the financial shortfall if your vehicle is written off or stolen. In either of these cases your insurer will only pay out the current market value of the vehicle which is unlikely to be enough to settle the outstanding amount of finance remaining on the vehicle and will certainly not be the amount you originally paid for it. Gap insurance covers you for this shortfall and gives you peace of mind that you will not be out of pocket if the worst does happen.

The car dealer will offer you a Gap Insurance product at the time of purchase and you may think that buying Gap Insurance from the dealer is the most convenient way to ‘get it out of the way’. However, the Gap Insurance that is supplied by a dealer is very often not the best product or price for you. As with any other product is very important that you shop around for the Gap Insurance cover that is best for you and not to take the first deal that comes along. Very often you will find the best Gap Insurance deals online.

The cost of Gap Insurance bought at a car dealer can range from £299 to £799 and at these levels it is tempting for the car buyer to think that the extra cost is not worth it, especially if it is more expensive than their comprehensive insurance policy through their car insurer. However when you can get an online Gap Insurance quote of around 1/3 of the price the dealers are offering, many people are finding that it is most definitely worth it.

ALA’s BTI+ policy enables you to clear the balance of the remaining finance or alternatively return to the invoice price – whichever is the higher of the two. This is ideal if you have purchased your car on finance and preferable to a ‘Return To Invoice’ policy which nearly every dealer sells since the invoice price will not cover the outstanding finance in most circumstances.

If you have bought at a discounted rate on a scheme such as the Government’s Scrappage Scheme for example, it is likely that these levels of discount will still be available a year from now. Also, especially in the uncertain economic times we are in, there is no guarantee that VAT will not go up again at some point in the near future. ALA’s Vehicle Replacement Policy, although a little more expensive, protects you from these possible price rises as it allows you to claim a higher monetary value than that of a BTI+ policy.

Click the following link for a Gap Insurance quote from ALA Insurance Brokers LLP who are authorised and regulated by the Financial Services Authority. FSA Firm Reference No 502910.