Gap insurance

[lofty]

The FCA are introducing new laws/guidelines this year to try and prevent dealers from ripping off customers with their inflated GAP policies. It will be interesting to see if they work.

[RSphantom]

I think there might be some confusion as to what type of GAP insurance is provided. As mine (and I suspect a lot of people have) is on a PCP contract the GAP cover I have is a "return to invoice cover".

So as an example; (not my actual figures)

Net Invoice cost of an RS6 after any discounts including factory options = £84,000

Total loss claim on car after 2 1/2 years with 30,000 miles the insurance company value car at £48,000 (I'm being generous here )

Approximate outstanding finance figure on PCP = £40,000

You don't end up with paying off the £40,000 PCP figure and have £8,000 left to start again. A return to invoice policy such as mine will mean the GAP cover will pay out £36,000 (the difference between the net invoice price and the insurance valuation) giving you effectively £44,000 net to put towards your next car. If you were to go for another RS6 at this time then probably the cost of the car will have increased from £84,000 to say £88,000 which means in reality you would have to pay an extra £4K.

So based on those figures to cover £36,000 over a three year term for £500 seems not too bad

Saying that after checking on a few sites I see I can get the cover cheaper Like I said though I don't do hassle.

[Graeme4130]

I think there might be some confusion as to what type of GAP insurance is provided. As mine (and I suspect a lot of people have) is on a PCP contract the GAP cover I have is a "return to invoice cover".

So as an example; (not my actual figures)

Net Invoice cost of an RS6 after any discounts including factory options = £84,000

Total loss claim on car after 2 1/2 years with 30,000 miles the insurance company value car at £48,000 (I'm being generous here )

Approximate outstanding finance figure on PCP = £40,000

You don't end up with paying off the £40,000 PCP figure and have £8,000 left to start again. A return to invoice policy such as mine will mean the GAP cover will pay out £36,000 (the difference between the net invoice price and the insurance valuation) giving you effectively £44,000 net to put towards your next car. If you were to go for another RS6 at this time then probably the cost of the car will have increased from £84,000 to say £88,000 which means in reality you would have to pay an extra £4K.

So based on those figures to cover £36,000 over a three year term for £500 seems not too bad

Saying that after checking on a few sites I see I can get the cover cheaper Like I said though I don't do hassle.

I think the Key is that doing it through Audi is less hassle
i got the Gap on my RS4 for £400, and yes I could've saved £100 by going elsewhere, but with Audi's policy it's clear cut and you just phone the insurance and ask the dealer to get you a new car
If that's 2years and 40k miles down the line, it's £400 well spent IMHO, and saves a lot of hassle trying to get Gap valuations from the 3rd party, and them arguing over why your insurance is only paying £x, when they should be paying £x+a

[HF25]

Yes, as far as I've been told the Policy is "return to invoice", and over that 3 year period in the event of a total loss the gap insurance will make up the difference between the market value the regular insurance pays, and the invoice price I paid. So potentially in year 3, this equates to £40000 plus.... How some see this as a rip off at less than £200 a year I really don't see, it seems pretty good to me.

I'm not in the finance or insurance industry, and maybe missing something, but to me it's a relatively small outlay to have peace of mind for three years on a substantial investment...

I will of course clarify the terms exactly before signing up to anything.

[W8PMC]

I think there might be some confusion as to what type of GAP insurance is provided. As mine (and I suspect a lot of people have) is on a PCP contract the GAP cover I have is a "return to invoice cover".

So as an example; (not my actual figures)

Net Invoice cost of an RS6 after any discounts including factory options = £84,000

Total loss claim on car after 2 1/2 years with 30,000 miles the insurance company value car at £48,000 (I'm being generous here )

Approximate outstanding finance figure on PCP = £40,000

You don't end up with paying off the £40,000 PCP figure and have £8,000 left to start again. A return to invoice policy such as mine will mean the GAP cover will pay out £36,000 (the difference between the net invoice price and the insurance valuation) giving you effectively £44,000 net to put towards your next car. If you were to go for another RS6 at this time then probably the cost of the car will have increased from £84,000 to say £88,000 which means in reality you would have to pay an extra £4K.

So based on those figures to cover £36,000 over a three year term for £500 seems not too bad

Saying that after checking on a few sites I see I can get the cover cheaper Like I said though I don't do hassle.

So if i'm reading that correctly, the GAP cover you're talking about (for £500) would give you £36000 cash in hand. If that's the case then not a bad bet, however that's not how GAP has ever been presented to me by any Dealer as it's basically shortfall insurance so using your example you'd get perhaps £4k for your £500 premium so you'd not be out of pocket when buying your replacement RS6.

[HF25]

I think there are 2 distinct types of GAP... Return to invoice which is what I understand I've been offered, and financial shortfall which is more what W8PMC is describing..

I agree £500 seems low for a potential £40 000 payout, but it's also a pretty low chance of it happening, a theft with vehicle not being recovered at some point, or a total loss collision, which is a big one...

Thankfully most of us will experience neither, so therefore the insurance companies make their money...

[RSphantom]

I think there might be some confusion as to what type of GAP insurance is provided. As mine (and I suspect a lot of people have) is on a PCP contract the GAP cover I have is a "return to invoice cover".

So as an example; (not my actual figures)

Net Invoice cost of an RS6 after any discounts including factory options = £84,000

Total loss claim on car after 2 1/2 years with 30,000 miles the insurance company value car at £48,000 (I'm being generous here )

Approximate outstanding finance figure on PCP = £40,000

You don't end up with paying off the £40,000 PCP figure and have £8,000 left to start again. A return to invoice policy such as mine will mean the GAP cover will pay out £36,000 (the difference between the net invoice price and the insurance valuation) giving you effectively £44,000 net to put towards your next car. If you were to go for another RS6 at this time then probably the cost of the car will have increased from £84,000 to say £88,000 which means in reality you would have to pay an extra £4K.

So based on those figures to cover £36,000 over a three year term for £500 seems not too bad

Saying that after checking on a few sites I see I can get the cover cheaper Like I said though I don't do hassle.

So if i'm reading that correctly, the GAP cover you're talking about (for £500) would give you £36000 cash in hand. If that's the case then not a bad bet, however that's not how GAP has ever been presented to me by any Dealer as it's basically shortfall insurance so using your example you'd get perhaps £4k for your £500 premium so you'd not be out of pocket when buying your replacement RS6.

Yes, pretty much. You can get other types including a new replacement policy which will basically covers the extra £4k as per the example. You can also get the cover as per your suggestion. Bit of a minefield really

[GLM]

I think there might be some confusion as to what type of GAP insurance is provided. As mine (and I suspect a lot of people have) is on a PCP contract the GAP cover I have is a "return to invoice cover".

So as an example; (not my actual figures)

Net Invoice cost of an RS6 after any discounts including factory options = £84,000

Total loss claim on car after 2 1/2 years with 30,000 miles the insurance company value car at £48,000 (I'm being generous here )

Approximate outstanding finance figure on PCP = £40,000

You don't end up with paying off the £40,000 PCP figure and have £8,000 left to start again. A return to invoice policy such as mine will mean the GAP cover will pay out £36,000 (the difference between the net invoice price and the insurance valuation) giving you effectively £44,000 net to put towards your next car. If you were to go for another RS6 at this time then probably the cost of the car will have increased from £84,000 to say £88,000 which means in reality you would have to pay an extra £4K.

So based on those figures to cover £36,000 over a three year term for £500 seems not too bad

Saying that after checking on a few sites I see I can get the cover cheaper Like I said though I don't do hassle.

So if i'm reading that correctly, the GAP cover you're talking about (for £500) would give you £36000 cash in hand. If that's the case then not a bad bet, however that's not how GAP has ever been presented to me by any Dealer as it's basically shortfall insurance so using your example you'd get perhaps £4k for your £500 premium so you'd not be out of pocket when buying your replacement RS6.

Yes, pretty much. You can get other types including a new replacement policy which will basically covers the extra £4k as per the example. You can also get the cover as per your suggestion. Bit of a minefield really

True - guess I should have stated that I'd only be wanting back to invoice type cover - will probably end up with the Audi one after a bit of haggling, mostly for the convenience.

[Graeme4130]

Audi's gap insurance is 'back to invoice'
Whether that includes your negotiated discount (which may or may not be readily available if you have to replace) is part of the negotiation you'd have to have with your dealer (i.e., car cost £80k, but retail list is £90k)

[W8PMC]

Audi's gap insurance is 'back to invoice'
Whether that includes your negotiated discount (which may or may not be readily available if you have to replace) is part of the negotiation you'd have to have with your dealer (i.e., car cost £80k, but retail list is £90k)

So i'm still a little confused as the above example indicates as i thought GAP worked, a shortfall (albeit £10k in that example), be that in finance settlement or gap to replace the car, but i've never heard of GAP paying out 10's of thousands of ££'s to payout your 30mth old car & allow you to buy a brand new one for just a £500 premium. That being the case, surely loads of 30mth old cars would be suspiciously vanishing or getting written off?

[GLM]

What Graeme was alluding to was the fact that the GAP policy will need to state what value the total payout will be in the event of a total loss of the vehicle - so if the insurance company pays out 70% of the total price, the GAP policy will then pay out the 30% to get you back to initial layout when purchasing a car. But that initial lay out may be £80k rather than £90k given you have had finance contributions etc...

If you only get a total pay out of £80k and to buy a new C7 now costs £90k as the contributions have dried up, technically you could say you are out of pocket to get a new car, albeit the insurances have totally reimbursed you.

I have often thought why are there not more cars being 'written off' just before the 36 month, but i guess
a) to write a car off on purpose to claim the money is fraud and unless you really see jail time worth the risk for £20-30k for the gap policy, its a stupid thing to do,
b) to write a car off is a bit difficult to do in a convincing way without putting your life at risk... i mean you can torch the car but then you're back to risk being caught at fraud much easier over say putting the car into a tree and saying a deer jumper out and it was just one of those things...

and like all insurances, its the law of averages - enough people buy it and they rarely pay out hence the value of it.

More details here:
https://www.insurewithaudi.co.uk/Produc ... tails.aspx

[W8PMC]

Well if that's the case then i stand corrected as i thought GAP was shortfall which even it's name indicates. I never thought it allowed a 3yr old car to turn into a brand new car should it be a total loss claim. I've no idea how often 'total loss' occurs so i'm still of the mind it's such a rarity that the cost probably outweighs the benefit, however if this scenario has happened to you or someone you know before then i guess it brings the likelihood closer to home so for a few hundred ££'s it would offer up piece of mind.

Still strikes me as odd given insurance as far as i've always been aware is meant to replace & not enhance so giving the policyholder the ability to make say £40-50k is strange. If your 3yr old C6 RS6 got totalled then an insurer would give you another 3yr old C6 RS6 (or the value of). I can't see why they'd give you lets say an extra £50k to go buy a brand new C7 RS6.

[Rustyruss67]

I managed to negotiate gap insurance and autoglym as part of my deal, and as it is said it covers the shortfall of the insurance companies payout and a brand new replacement

[aljenod]

Found ALA to always offer good rates, Contract Hire Gap Policy, £50,000, 2 yrs, £305