GAP insurance on a renault zoe
Discussion
Hi all,
Having never bought a car using finance, I'm not too clued up on GAP insurance, although I understand the principle of it.
I'm ceriously considering buying a Zoe this month, and will no doubt be encouraged to take out the packaged GAP ins, which I know will be overpriced. I'd therefore like to have prepared a few quotes first but I'm confused on what figures I should be using due to the government / manufacturer contributions and the battery cost.
Does anyone know how to work out the figures?
Thanks for any help.
Having never bought a car using finance, I'm not too clued up on GAP insurance, although I understand the principle of it.
I'm ceriously considering buying a Zoe this month, and will no doubt be encouraged to take out the packaged GAP ins, which I know will be overpriced. I'd therefore like to have prepared a few quotes first but I'm confused on what figures I should be using due to the government / manufacturer contributions and the battery cost.
Does anyone know how to work out the figures?
Thanks for any help.
Thanks for the replies guys,
Well the list is about £20k and the GFV is £8.2k so in a worst case scenario I'm looking at covering £12k on GAP? Online quotes are circa £130 whereas renault is £399 I believe. That's quite a difference.
Also, I would have thought that just getting enough GAP cover to clear my finance would be substantially less, as my invoice is only £9k.
Well the list is about £20k and the GFV is £8.2k so in a worst case scenario I'm looking at covering £12k on GAP? Online quotes are circa £130 whereas renault is £399 I believe. That's quite a difference.
Also, I would have thought that just getting enough GAP cover to clear my finance would be substantially less, as my invoice is only £9k.
Can someone explain to me in terms a small child would understand, and with workings out, as to why GAP insurance is needed on a PCPd ZOE??
Say the car is written off 12 months into a 24 month agreement, what happens?
We've got one coming early in the new year. 24month PCP - £150 deposit, £155 per month. No GAP insurance as yet.
Say the car is written off 12 months into a 24 month agreement, what happens?
We've got one coming early in the new year. 24month PCP - £150 deposit, £155 per month. No GAP insurance as yet.
not sure I can explain it better than a GAP insurer's website but, AIUI
by virtue of the PCP agreement and the battery lease agreement you owe renault a sum of money
let's say that is £9k for the car and £6k for the battery (these are made up numbers to illustrate the principle)
in cash terms, you are paying 24 x £155 = £3720 + £150 = £3,970
some of this is interest, some is battery lease and some is loan principle
There will be a GFV figure on the paperwork - the amount you would have to pay to own the car outright - and a battery replacement cost on there too, let's say that is £7k on the car GFV and £6k on the battery replacement (these are made up numbers to illustrate the principle)
So, the total you owe, one way or another is £3,970 + £7k + £6k = £16,970
Now, normally, you could give them the car & battery back at the end of the 24 months at which point, if your payments are up to date, the matter is concluded
However, if the car & its battery are stolen, renault wants its money back
Let's say the car is stolen the day before it is due to go back and that you have paid all your monthly payments (and that the battery lease ends at the same time as the car pcp)
renault wants £13k in lieu of the car + battery
your insurer offers you £10k
the gap insurance covers the gap between your insurers offer and what renault wants, in this case £3k
by virtue of the PCP agreement and the battery lease agreement you owe renault a sum of money
let's say that is £9k for the car and £6k for the battery (these are made up numbers to illustrate the principle)
in cash terms, you are paying 24 x £155 = £3720 + £150 = £3,970
some of this is interest, some is battery lease and some is loan principle
There will be a GFV figure on the paperwork - the amount you would have to pay to own the car outright - and a battery replacement cost on there too, let's say that is £7k on the car GFV and £6k on the battery replacement (these are made up numbers to illustrate the principle)
So, the total you owe, one way or another is £3,970 + £7k + £6k = £16,970
Now, normally, you could give them the car & battery back at the end of the 24 months at which point, if your payments are up to date, the matter is concluded
However, if the car & its battery are stolen, renault wants its money back
Let's say the car is stolen the day before it is due to go back and that you have paid all your monthly payments (and that the battery lease ends at the same time as the car pcp)
renault wants £13k in lieu of the car + battery
your insurer offers you £10k
the gap insurance covers the gap between your insurers offer and what renault wants, in this case £3k
whenever I read about GAP insurance, it always sounds a bit scammy to my simple mind - a way for the insurance industry to sell you a second product to cover the disappointment of the first product not quite delivering what you would expect.
I am thinking of buying some in case its the next PPI and I can claim massive compo down the road....
I am thinking of buying some in case its the next PPI and I can claim massive compo down the road....
sawman said:
whenever I read about GAP insurance, it always sounds a bit scammy to my simple mind - a way for the insurance industry to sell you a second product to cover the disappointment of the first product not quite delivering what you would expect.....
Me too.. I just tried to explain it to my wife and her response was along the lines of "two sets of insurance, one to insure the first against being s
t?.. fk off!" GAP insurance has a place in a world where people don't understand the complex nature of some of the ways that they 'buy' a car
If you buy an approved used BMW for £30k, how much could you sell it for the next day? What margin has the dealer made and is that covered by your insurance in the event of a total loss claim? Does your insurance policy cover the invoice value, the retail price of the car or the trade price of the car (how many of you have even checked?)
If you buy on a pcp product with a very high GFV to minimise monthly payments, how close is that GFV to the actual value of the car at that point in time?
When you are buying your normal insurance policy, do you go for the one with the best features for your needs, or the cheapest (without really understanding what is and what isn't covered)?
It isn't an essential purchase for everyone acquiring a new (to them) car, but it does have a place
If you buy an approved used BMW for £30k, how much could you sell it for the next day? What margin has the dealer made and is that covered by your insurance in the event of a total loss claim? Does your insurance policy cover the invoice value, the retail price of the car or the trade price of the car (how many of you have even checked?)
If you buy on a pcp product with a very high GFV to minimise monthly payments, how close is that GFV to the actual value of the car at that point in time?
When you are buying your normal insurance policy, do you go for the one with the best features for your needs, or the cheapest (without really understanding what is and what isn't covered)?
It isn't an essential purchase for everyone acquiring a new (to them) car, but it does have a place
JPJPJP said:
GAP insurance has a place in a world where people don't understand the complex nature of some of the ways that they 'buy' a car
If you buy an approved used BMW for £30k, how much could you sell it for the next day? What margin has the dealer made and is that covered by your insurance in the event of a total loss claim? Does your insurance policy cover the invoice value, the retail price of the car or the trade price of the car (how many of you have even checked?)
If you buy on a pcp product with a very high GFV to minimise monthly payments, how close is that GFV to the actual value of the car at that point in time?
When you are buying your normal insurance policy, do you go for the one with the best features for your needs, or the cheapest (without really understanding what is and what isn't covered)?
It isn't an essential purchase for everyone acquiring a new (to them) car, but it does have a place
I suppose the bottom line is that insurance companies fight for business on headline price, to do this they have taken out things that someone might assume was covered completely - and they then sell you these items as additions if you read the small print and realise that some things are missing. If you buy an approved used BMW for £30k, how much could you sell it for the next day? What margin has the dealer made and is that covered by your insurance in the event of a total loss claim? Does your insurance policy cover the invoice value, the retail price of the car or the trade price of the car (how many of you have even checked?)
If you buy on a pcp product with a very high GFV to minimise monthly payments, how close is that GFV to the actual value of the car at that point in time?
When you are buying your normal insurance policy, do you go for the one with the best features for your needs, or the cheapest (without really understanding what is and what isn't covered)?
It isn't an essential purchase for everyone acquiring a new (to them) car, but it does have a place
The last time I bought a new car, there was a clause in the policy which would replace my car if i suffered total loss in the first 12 months of the cars life - I am not sure if these clauses still exist as its over 10 years since I had a new car so it hasnt ben relevent. Classic policies have agreed values which makes things clearer.
I think the insurance industry need to be more upfront with sensible information as it seems they rely on folks not reading small print and being underinsured. The concept of having to take a second policy to cover the shortfall in the first one just seems wrong, and scammy to me
as for GFV not being actual value - dont even get me started on that....
From my Aviva policy:
"New vehicle replacement
We will replace your vehicle with a new vehicle of the same make, model and specification (if one
is available in the UK) if, within 12 months of the principal policyholder, vehicle policyholder or a
partner buying your vehicle from new:
any repair cost or damage in respect of any one claim covered by the policy is more than 60% of the
vehicle’s UK list price (including vehicle tax and VAT) when your vehicle was purchased, or
your vehicle is stolen and not recovered."
So don't need any GAP insurance it seems for year 1? Quite how this takes in to account reducing subsidies I don't know. Do I get a new car?
(It seems you can buy Gap for several years, but you have to buy within 6 months of purchase)
Had RenaultFinance on the phone this morning trying to sell me GAP (though he said he can't try to sell...). Pointed out I could get it at half the price at independent suppliers who also offer a policy that allows for full replacement and not just back to invoice. (Invoice is only £10k, a replacement could be up to £20k if subsidies end).
"New vehicle replacement
We will replace your vehicle with a new vehicle of the same make, model and specification (if one
is available in the UK) if, within 12 months of the principal policyholder, vehicle policyholder or a
partner buying your vehicle from new:
any repair cost or damage in respect of any one claim covered by the policy is more than 60% of the
vehicle’s UK list price (including vehicle tax and VAT) when your vehicle was purchased, or
your vehicle is stolen and not recovered."
So don't need any GAP insurance it seems for year 1? Quite how this takes in to account reducing subsidies I don't know. Do I get a new car?
(It seems you can buy Gap for several years, but you have to buy within 6 months of purchase)
Had RenaultFinance on the phone this morning trying to sell me GAP (though he said he can't try to sell...). Pointed out I could get it at half the price at independent suppliers who also offer a policy that allows for full replacement and not just back to invoice. (Invoice is only £10k, a replacement could be up to £20k if subsidies end).
JPJPJP said:
GAP insurance has a place in a world where people don't understand the complex nature of some of the ways that they 'buy' a car
If you buy an approved used BMW for £30k, how much could you sell it for the next day? What margin has the dealer made and is that covered by your insurance in the event of a total loss claim? Does your insurance policy cover the invoice value, the retail price of the car or the trade price of the car (how many of you have even checked?)
If you buy on a pcp product with a very high GFV to minimise monthly payments, how close is that GFV to the actual value of the car at that point in time?
When you are buying your normal insurance policy, do you go for the one with the best features for your needs, or the cheapest (without really understanding what is and what isn't covered)?
It isn't an essential purchase for everyone acquiring a new (to them) car, but it does have a place
The advantage of the hugely subsidised Zoe is that after 4 years the GFV is about £6k on the Renault PCP deal, whereas "list" is about £20k, so just 30% which seems about right for a 4 year old car. If you buy an approved used BMW for £30k, how much could you sell it for the next day? What margin has the dealer made and is that covered by your insurance in the event of a total loss claim? Does your insurance policy cover the invoice value, the retail price of the car or the trade price of the car (how many of you have even checked?)
If you buy on a pcp product with a very high GFV to minimise monthly payments, how close is that GFV to the actual value of the car at that point in time?
When you are buying your normal insurance policy, do you go for the one with the best features for your needs, or the cheapest (without really understanding what is and what isn't covered)?
It isn't an essential purchase for everyone acquiring a new (to them) car, but it does have a place
Better than £6k GFV on a £10k car where you would be way short of getting enough under a write off to pay off the finance.
To me this makes the case for GAP on a ZOE quite weak unless you want the version where you don't go back to invoice but get the replacement value - which could in 4 years time be £20k not £10k due to subsidy withdrawal.
So - to me it seems that DON'T get back to invoice GAP, but DO consider replacement value GAP. ala.co.uk call it Vehicle Replacement Insurance. Get it through topcashback and get 10% off!
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