Free £250 excess cover

More info

Gap insurance

We don’t offer Gap insurance comparison - here are some companies[1] offering quotes[2]

  • As one of the UK’s largest car insurance providers, Admiral like to make sure their customers have all bases covered. That’s why they provide Gap insurance, to cover financial shortfall in the event your car is written off or stolen. Admiral cover a variety of different makes and models, providing they are less than five years old.

    Go to site
  • Worried where you’ll turn in the event of a write-off? MotorEasy can help. Its GAP insurance policies cover both new and used cars whether bought outright or on finance. Pay a fraction of the prices dealers charge.

    Go to site
  • Since 1990 ALA has been dedicated to providing top quality financial products within the motor industry, to both the personal and corporate client. As an FCA authorised company, ALA is able to offer specialist insurance policies, including GAP insurance, developed with its extensive knowledge of the market in which it operates.

    Go to site

What is Gap insurance?

You’ve bought a new car with finance. Your car insurance covers you to drive on the road the second you leave the forecourt.

However, if you’re involved in a traffic accident where the car’s written off, or the car gets stolen, your credit payments aren’t protected under car insurance.

The car’s gone, but the large outstanding debt remains.

Guaranteed asset protection (Gap) insurance is an extra policy you can buy to protect your finances if you’ve taken out credit to pay for a new car.

It pays the shortfall between your car’s value when you bought it and its current value if you were to sell it. Sometimes, you might still have more than half of the finance left to pay.

For example, if you bought a car on finance for £20,000 and it depreciated by 60% in 3 years, the car would be worth £8,000. If the car was written off, your insurer would pay the market value of £8,000, so you’re £12,000 out of pocket. Gap insurance would cover that £12,000 so you can get back to driving a brand-new car.

what is gap insurance for cars?

How much is Gap insurance?

If you buy a gap insurance policy separately from the dealership, it’s around £100 for three years of cover.

You’ll usually pay for a gap insurance policy upfront. You’ve already paid a sizeable cash deposit for the car and the last thing you want to do is spend another £100.

But it’s best to shop around and compare online to find the best deal, because the dealership where you bought the car will also offer you a Gap policy.

According to research conducted by Which? in September 2019, dealerships were charging up to 278% more than insurers for products like Gap. The policies were up to £367 more expensive.

The good news is that car dealerships aren’t allowed to sell you Gap insurance at the same time as you buy a car from them - the Financial Conduct Authority (FCA) says you must have breathing room to shop around. Specifically, you must have a ‘pause in sale’ of two days.

In reality that means on the day you pick the car and the dealership starts the sales process. Then it’ll ask you to come back to finalise the credit agreement a few days later - it’s more than likely that’s when you’ll be sold the gap policy, so use the time to get a fairly priced Gap policy.

You’ll overpay for Gap insurance if you buy it from a dealership, but you might not notice because the price is often bundled in with your car finance.

Features of gap insurance

As with all insurance policies, make sure you get the cover you want - reliable gap insurance that resolves outstanding finance quickly.

There are always exclusions in your insurance. We’ve given some of the most common ones below, but as an example, if you’re using the car in an emergency and write it off, you won’t usually be covered. And, if you request a cash settlement from your car insurance rather than have the repairs made, you may not be able to claim on your policy either.

Investigate how the insurer plans to calculate the market value of your car if you have to make a claim. If you’re unsure about their working, or disgree with the method - perhaps you’ve made valuable modifications which aren’t accounted for - speak to them.

If you want to sell the car, sometimes you can transfer the policy rather than buy a new one. And if you’ve paid in full at the start of an agreement, but exit it early, some insurers will refund you the proportion of gap cover you no longer need.

Types of Gap insurance

Return to value cover (RTV)

This is for cars bought privately or from a dealer, but not within the past three months.

It covers the difference between the insurance valuation at write-off and the value of the car when you opened the Gap policy.

Return to invoice cover (RTI)

RTI is for cars bought from a dealer within the last three months.

In the event of a write-off, the payout is the difference between the valuation and the original purchase invoice price.

Vehicle replacement insurance (VRI)

New car? This one is for you.

The payout covers the difference between the valuation and the cost of buying a brand-new car, even if that price has risen.

If you have fully comprehensive car insurance, read the small print. Some insurers offer a new replacement car service if the car is under 12 months old, so you may not need gap insurance.


Finance Gap insurance pays the difference between the vehicle’s market value at loss and whatever amount is still outstanding on your finance agreement.

After an accident, contact both your main car insurance provider and your Gap provider as soon as possible.

Do I need Gap insurance?

If losing value is a concern, you have a finance deal left to settle, or if you want to make sure you go back to driving a new car, then Gap insurance is the answer.

Before taking out a Gap policy, make sure you can afford the price of the premium on top of your regular insurance cover and any possible monthly loan or leasing fees.

If you have a Personal Contract Hire (PCH) lease you don’t own the car, but you’ve agreed to pay the finance for a fixed term, we can’t help you get gap insurance for leased cars, however there are contract hire gap policies to help you cover the shortfall if you write off the car.

Gap insurance exclusions

Watch out for these common exclusions on your Gap insurance:

  1. Your Gap insurance will only pay out if you have fully comprehensive car insurance

  2. Your car must be confirmed as a total write-off, and you will only receive payment after your claim has been successful

  3. It will not pay out if your car was written off as a result of drink or drug driving

  4. Or if someone else was driving your vehicle without a valid driving licence

  5. It won’t pay the difference if you underestimated the value of your vehicle when taking out Gap insurance

  6. It won’t cover any non-standard modifications you make to the car after purchasing it

  7. A gap insurer may not provide cover if you pay over a certain annual value for your car insurance - read the small print closely

Car insurance guides

[1]We do not offer a full comparison service on Gap insurance at but instead have provided links to some companies that offer Gap insurance. These companies are not listed in an order that indicates that one is better than another but are instead ordered in line with our commercial arrangement with each one. Please remember, as different companies offer different policies, it is up to you to choose the one that best suits your needs.

[2] introduces you to Admiral, MotorEasy and ALA to provide Gap insurance quotes. All providers are authorised and regulated by the Financial Conduct Authority.’s relationship with Admiral, MotorEasy and ALA is limited to that of a business partnership, no common ownership or control rights exist between us

GoCompare uses cookies. By using the website you agree with our use of cookies. Continue Find out how to manage cookies and view our policy here