2016 saw a record high for used cars sales, with the volume of sales declining slightly coming into the start of 2017. However, surprisingly, a recent survey from Opinium has revealed that very few drivers are properly protecting their investments and are leaving themselves open for potentially huge loses, should they crash.
In a survey of 2,000 drivers, only just over a quarter of those surveyed (28%) said that they were familiar with GAP Insurance and what it entailed. Over two thirds of respondents (72%) said that they had either never heard of the type of insurance, or were unfamiliar with it. Surprisingly, only 11% of participants in the survey revealed that they actually had GAP Insurance.
What Is GAP Insurance?
GAP insurance can be vital if you pay for a car via finance, particularly if you only offer a small deposit and spread the payment over a number of years.
This is because, if you’re involved in an accident, and if your car is written off, then your insurance company will only pay out what the car was worth at the time of the accident, not the amount that you paid for it. Due to the fact that cars depreciate in value – sometimes rapidly – this could mean that you’re paid out less than you owe, potentially by thousands of pounds. With studies showing that one in five drivers have a car written off during their time spent driving, this is a serious issue.
GAP Insurance means that the ‘gap’ between what your car is worth currently and the amount paid by the insurer is covered. Your GAP insurer will pay the difference between these two amounts, meaning that you’re not out of pocket and don’t owe any finance on a vehicle you no longer own.
Why Don’t Drivers Have GAP Insurance?
As the above has shown, it appears as though GAP Insurance is vital for most drivers with finance. However, many drivers do not currently have GAP Insurance because they’re unaware of its existence.
In response to the above survey, 35% of respondents didn’t know that GAP Insurance existed, while 29% were never offered it and 19% said that they didn’t know enough about it to make an informed decision. Only 15% didn’t buy it because they didn’t see the point of it.
How Do I Get GAP Insurance?
Getting GAP Insurance is easier than ever before. Thanks to the advent of the internet, it’s far simpler than ever to research what level of coverage you need, and to find the best provider for your requirements.
Whereas people used to be tied into what they were offered at the dealership, now online companies also offer GAP Insurance, which can help to provide a more affordable solution than the forecourt options, which often come at a premium.
However, before you buy GAP Insurance, you should always do your research to make sure that you’re getting the correct level of cover, as the cheapest package may not necessarily be the best.