Vehicle Finance GAP Insurance

Vehicle Finance

Let’s say you bought a car for £25,000 with a finance deal, and after a couple of years, you still owe £18,000 on your loan. Then the unexpected happens, and your car is stolen or written off. Your standard insurance only covers the current market value of £15,000, so you’re left with a £3,000 shortfall to clear your finance agreement. This is where Vehicle Finance GAP insurance is a gamechanger.

Vehicle Finance GAP insurance covers the difference between the insurance pay out and the amount you still owe on your finance agreement. In our example, it would pay off the remaining £3,000, ensuring you’re not left with outstanding debt for a car you no longer have.

It’s important to note that this type of insurance won’t give you extra money to buy a new car, but it does clear your existing finance so you’re not out of pocket. If your car is financed or you have a PCP (Personal Contract Purchase) loan, this coverage is essential.