Calculate whether GAP insurance is worth buying for your car. Compare the potential payout gap, premium cost, and whether dealer or specialist GAP cover offers better value.
GAP (Guaranteed Asset Protection) insurance covers the difference between your car's current market value (what your motor insurer pays if the car is written off or stolen) and either the original purchase price (Return to Invoice) or the outstanding finance balance. Without GAP insurance, a write-off early in your finance term can leave you still owing thousands while having no car.
Comprehensive car insurance only pays the current market value of your car at the time of the claim — not what you paid for it or what you owe on finance. Cars depreciate rapidly: a new car loses 15-20% in the first year and 50% in three years. If you finance a car at full price and it is written off after 18 months, the insurance payout may be £3,000-£5,000 less than you owe. GAP insurance covers this shortfall.
Dealer GAP insurance is typically 2-4× more expensive than standalone policies from specialist GAP insurers. A dealer may charge £300-£500, while a standalone policy for the same cover may cost £100-£200. Under FCA rules, dealers must provide a 4-day reflection period before selling GAP insurance. Always compare quotes from specialist providers like ALA or Motoreasy before accepting the dealer's policy.
Return to Invoice (RTI): pays the difference between the insurance payout and the original invoice price. Finance GAP: only covers the difference between the insurance payout and the outstanding finance balance (no protection if finance is paid off). Combined RTI + Finance: covers whichever is higher — the invoice price shortfall or the finance gap. Agreed Value: covers a pre-agreed value, often more than the invoice price.
GAP insurance may not be worthwhile if: you paid cash for the car (no finance gap risk, though invoice gap still exists); the car holds its value well (classic/prestige cars depreciate slowly); you have a large deposit reducing the finance balance quickly; or the car is more than 3 years old and already heavily depreciated. Calculate the actual gap using our calculator before deciding.