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What is Invoice GAP insurance and who can buy it?

This type of GAP Insurance policy is the most popular form of GAP Insurance.

If you bought your vehicle (cash, HP, PCP etc) Invoice GAP Insurance aims to pay the difference between your Motor Insurance payout and THE GREATER of either,

1. The amount outstanding on finance at the time of claim, OR
2. The original invoice price that you bought the vehicle for.

Eligibility

It's available for vehicles that (at the time of purchasing the policy) are less than 10 yrs old, that were bought within the last 365 days (1-year) from either a VAT registered UK Motor Dealer or a private seller, for a purchase price of up to £150,000.

Claim Limits

Claim Limit options range from £5,000 to £Unlimited (please note that the maxiimum claim limit for vehicles bought for between £100k and £150k is £100k) and durations from 1 to 5 years are available with the option to defer the start date of by up to 12 months from the date the vehicle was first registered if you have New for Old cover during the first year of your Motor Insurance policy.

For guidance on what Claim Limit might be appropriate for you, please click here.

How does Invoice GAP Insurance work?

In the event of your vehicle being declared a Total Loss (aka "written off") as a result of an accident, fire or theft, your comprehensive Motor Insurance policy would normally only pay out the market value of the vehicle at the time of loss.

Now, imagine that you'd bought the vehicle, two years ago for £22k and imagine that the current Market Value of the vehicle is only £10k.

If your Motor Insurance policy only pays you £10k, you're going to be able to only buy a vehicle of the same age, mileage and condition as the one that was written off at the time it was written off.

Invoice GAP Insurance however, would in this example, pay the £12k difference between the Motor Insurance payout and the £22k you originally bought the vehicle for, or (if higher) the difference between your Motor Insurance payout and the amount outstanding on finance at the time of loss.

How Invoice GAP Insurance Works
Key Features of Invoice GAP Insurance
  • DOES NOT exclude costs such as Warranties, Registration Fees, Insurance Premiums, Road Fund Licence or fuel & paintwork protection applications.*
  • NO right to reduce the GAP Insurance payout if your Motor Insurance policy pays out less than the Market Value of your vehicle at the time of loss.*
  • A combination of Invoice and Finance GAP Insurance - Covering up to the greater of either the original invoice price or the outstanding finance.***
  • CASH to you rather than to a nominated dealer, leaving you free to choose the provider of your replacement vehicle ****
  • Available for Cars and Light Vans, up to 5 years old, purchased within the last 365 days from an authorised dealer or finance house.
  • Ability to cancel the policy at any time and receive a pro-rata refund of unused premium with NO CANCELLATION FEE!
  • FREE option to defer the start date of the policy by up to 12 months from the date the vehicle was first registered.
  • Available for Cars or Light Vans less than 5 years old, bought for up to £150,000 within the last 365 days.
  • OPTION to include cover for up to £2,000 of negative equity brought forward from your previous vehicle.
  • Underwritten by UK General Insurance Limited, on behalf of Great Lakes Insurance SE.
  • Pays £250 towards the excess on your Comprehensive Motor Insurance policy.
  • NO right to revalue the purchase price of your vehicle at the time you bought it.*
  • FREE transfer of any unused premium on to a replacement vehicle.
  • Policy durations of up to 5 years available.
  • Claim Limits of up to £100,000 available.
  • FREE policy amendments.

 

* Applicable only to policies purchased after March 28th 2013.
*** Subject to the policy terms, conditions, exclusions and Claim Limit.
**** If there is finance secured on the vehicle, the finance company may insist that our payout is made to them directly, with you then being paid any balance that remains.

What Claim Limit Do I Need?

The most frequently asked question... The honest answer, is that it very much depends how much your vehicle is going to depreciate by over the duration of the Invoice GAP Insurance policy.

Guess!

Considering that nobody knows for sure how much your vehicle is going to depreciate, it's a little bit of guess work. A common perception is that the average vehicle will depreciate by between 40% and 70% over a three year period; and indeed lots do - it's not a bad starting point for selecting a Claim Limit.

The issue with this perception though, is that it's never a steady rate of depreciation. Vehicles depreciate faster (a greater %'age) in their earlier years (in terms of the age of the vehicle) than they do in their later years. So, whilst your vehicle might well only depreciate by say 50% over a 3 year duration, it could well be that perhaps 30% (or more) of that, was in the first year alone!

When choosing a Claim Limit for any GAP Insurance policy, you have to try to predict the potential depreciation over the entire duration of the policy. If, for example, for a £15,000 vehicle you chose a 3 year policy with a Claim Limit of £5,000 (33%), this may well be sufficient for the first year, but with the potential for the vehicle to depreciate by up to 50%, 70% or even more, a £5,000 Claim Limit would likely be woefully inadequate as you approach the end of the policy.

Still guessing?

But this is all still guess work. We want to flip it on it's head a little. Read on...

10 Of Our Invoice GAP Insurance Claims - What claim limit would you have chosen?

What we're showing you below are details of actual claims that have paid out on some of our Invoice GAP Insurance policies, along with the vehicle details including the original purchase price and the length of ownership.

From this, we can calculate the rate of depreciation as a cash value per month and also reflect the total depreciation over the same duration as a percentage of the original purchase price.

You might be surprised at how well (little depreciation) some vehicles performed and how bad (considerable depreciation) others did.

It makes for some very interesting reading, but that aside, whilst it doesn't entirely remove the element of guess work for you, we're confident that being able to see the vehicle types, values and durations of ownership alongside the payout/depreciation figures, will surely be of great help in you choosing a claim limit that you feel most comfortable with.

  • BMW X5
  • GAP Insurance Example: BMW X5. Purchased: November 2014. Owned For 31 Months. Depreciated by 27.47% of Invoice Price. GAP Insurance paid out: £8,239.25
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • November 2014
  • £29,995.00
  • June 2017
  • £8,239.25
  • Length of ownership
  • 31 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £265.78 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 27.47% of its original Invoice Price during the 31 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £133.05 the cost of the policy represents 1.61% of the amount paid out.
  • Hyundai IX35
  • GAP Insurance Example: Hyundai IX35. Purchased: June 2014. Owned For 36 Months. Depreciated by 41.41% of Invoice Price. GAP Insurance paid out: £9,110.00
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • June 2014
  • £22,000.00
  • June 2017
  • £9,110.00
  • Length of ownership
  • 36 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £253.06 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 41.41% of its original Invoice Price during the 36 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £86.26 the cost of the policy represents 0.95% of the amount paid out.
  • BMW 4 SERIES
  • GAP Insurance Example: BMW 4 SERIES. Purchased: June 2016. Owned For 11 Months. Depreciated by 29.95% of Invoice Price. GAP Insurance paid out: £10,875.00
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • June 2016
  • £36,305.00
  • May 2017
  • £10,875.00
  • Length of ownership
  • 11 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £988.64 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 29.95% of its original Invoice Price during the 11 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £174.60 the cost of the policy represents 1.61% of the amount paid out.
  • Ford Ka
  • GAP Insurance Example: Ford Ka. Purchased: March 2014. Owned For 38 Months. Depreciated by 52.83% of Invoice Price. GAP Insurance paid out: £3,354.00
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • March 2014
  • £6,349.00
  • May 2017
  • £3,354.00
  • Length of ownership
  • 38 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £88.26 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 52.83% of its original Invoice Price during the 38 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £85.00 the cost of the policy represents 2.53% of the amount paid out.
  • Mercedes-Benz E Class
  • GAP Insurance Example: Mercedes-Benz E Class. Purchased: November 2014. Owned For 29 Months. Depreciated by 25.75% of Invoice Price. GAP Insurance paid out: £8,110.00
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • November 2014
  • £31,500.00
  • April 2017
  • £8,110.00
  • Length of ownership
  • 29 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £279.66 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 25.75% of its original Invoice Price during the 29 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £311.00 the cost of the policy represents 3.83% of the amount paid out.
  • Porsche Boxster
  • GAP Insurance Example: Porsche Boxster. Purchased: October 2015. Owned For 18 Months. Depreciated by 22.17% of Invoice Price. GAP Insurance paid out: £10,693.04
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • October 2015
  • £48,223.00
  • April 2017
  • £10,693.04
  • Length of ownership
  • 18 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £594.06 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 22.17% of its original Invoice Price during the 18 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £163.42 the cost of the policy represents 1.53% of the amount paid out.
  • BMW 1 series
  • GAP Insurance Example: BMW 1 series. Purchased: March 2017. Owned For 1 Months. Depreciated by 10.83% of Invoice Price. GAP Insurance paid out: £3,705.85
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • March 2017
  • £34,210.00
  • April 2017
  • £3,705.85
  • Length of ownership
  • 1 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £3,705.85 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 10.83% of its original Invoice Price during the 1 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £181.53 the cost of the policy represents 4.90% of the amount paid out.
  • BMW 3 Series
  • GAP Insurance Example: BMW 3 Series. Purchased: March 2015. Owned For 25 Months. Depreciated by 35.54% of Invoice Price. GAP Insurance paid out: £10,663.10
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • March 2015
  • £30,000.00
  • April 2017
  • £10,663.10
  • Length of ownership
  • 25 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £426.52 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 35.54% of its original Invoice Price during the 25 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £119.71 the cost of the policy represents 1.12% of the amount paid out.
  • Mercedes-Benz C Class
  • GAP Insurance Example: Mercedes-Benz C Class. Purchased: August 2015. Owned For 19 Months. Depreciated by 24.59% of Invoice Price. GAP Insurance paid out: £7,130.00
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • August 2015
  • £29,000.00
  • March 2017
  • £7,130.00
  • Length of ownership
  • 19 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £375.26 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 24.59% of its original Invoice Price during the 19 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £104.76 the cost of the policy represents 1.47% of the amount paid out.
  • BMW 2 SERIES
  • GAP Insurance Example: BMW 2 SERIES. Purchased: July 2016. Owned For 8 Months. Depreciated by 15.85% of Invoice Price. GAP Insurance paid out: £4,232.00
  • Vehicle Purchased
  • Invoice Price
  • GAP Insurance Claim
  • GAP Insurance paid out
  • July 2016
  • £26,707.00
  • March 2017
  • £4,232.00
  • Length of ownership
  • 8 Months
  • Rate Of Depreciation (£ p/m)*
  • An average of £529.00 Per Month
  • Total Depreciation (%'age)*
  • This vehicle depreciated by 15.85% of its original Invoice Price during the 8 months it was owned.
  • Policy Cost Vs Payout (%'age)
  • At £123.67 the cost of the policy represents 2.92% of the amount paid out.