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Guaranteed Asset Protection (GAP) cover is an insurance designed to cover the difference between the amount you paid for the car and the amount an insurance company will pay if its written off or stolen.

An insurance policy will usually cover you for the value of a like-for-like replacement and, on the basis that the value of your vehicle will depreciate the minute you leave the showroom, this can be be considerably lower than the price you paid. It can be particularly challenging if you bought the car on finance as you can still be left with money owing after receiving your insurance payment.

GAP insurance is relatively low cost and covers this short-fall.

  • Settles finance, hire, and lease agreements
  • Variable benefit levels
  • New and used vehicle cover
  • Policy excess contribution (up to £250)

The Alan Boswell Group Difference

ABG Difference

We are not on any internet comparison sites and do not have any cuddly toys or gimmicky marketing tricks. We just put all our effort in providing our customers the best cover, for the right price combined with a premium-level service.

We believe in providing our customers competitive car insurance with products suitable for their needs. Being independent we are able to provide impartial advice on the best product for your needs. 

How our customers rate us

I have used Alan Boswell for about 15 years now and have always been exceptionally pleased with the service.

Mr Calver, Private Car Insurance

GAP Insurance in detail

In the event of a vehicle being stolen and not recovered or in an accident and declared a total loss, few customers will receive a motor insurance pay out equivalent to the original purchase price from their motor insurer. GAP is important as vehicles depreciate over time and average figures suggest that a 2-year-old vehicle would be worth about 65% of its original value, a 3-year-old vehicle 45% – 50% and for 4 years its value could drop to 35%-45% (these may vary depending on vehicle make and model). Your insurer will value your vehicle in line with the depreciation.

GAP insurance covers the difference between your insurance settlement at the point your vehicle is written off or declared a total loss and the purchase price of your vehicle when you bought it. The implications of having a total loss:

  • You may still have a sizeable outstanding liability on your financing commitments.
  • You may have to make do with a lower specification replacement vehicle as the insurance settlement figure will be based on the value of the vehicle on the date of your total loss.
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Here’s an example

If your car is declared a total loss by your motor insurer, your insurer will offer you a final settlement based on the vehicle’s value on the day of the accident.

As we know, there is likely to be a depreciation on your vehicle, therefore is it very unlikely to be the amount that you paid for the vehicle.

Do you need GAP insurance?

It is very important to ask yourself if you really need GAP insurance.

A comprehensive motor insurance policy will pay out for a replacement car that is like-for-like for the one you had when it was stolen or written off – so if you’re happy with a second-hand replacement then you really don’t need GAP cover. Even if you buy the car on finance you’ll still be driving the same make and model with a similar mileage – so you’re theoretically no worse off.

It’s also worth noting that if your car is less than a year old your insurance will likely pay out the value of buying a new car (usually because there is not many second hand vehicles around).

But – if you’re concerned about the depreciation value of your car then it’s worth considering GAP cover.

Car value depreciation

You can read a fantastic guide to car value depreciation here – but a new car will depreciate approx. 40-60% during the first three years. That means if you buy a car for £26,000, in three years your car may only be worth £10,400.

In the first year alone this can be up to 40% – so again, that £26,000 car could be worth just £15,600 within 12 months of driving it off the forecourt. If you had finance on this vehicle and it was written off after 12 months you would likely owe way more than the £15,600 you could get from an insurance pay-out, leaving you considerably out of pocket.

Car depreciation is far more exaggerated for new cars than second-hand cars. So, if you’re buying a second hand car GAP insurance may not be as useful.

Choosing a car

Some cars depreciate far quicker than others – so you can reduce the risk of a financial loss by choosing your car wisely – but if your heart is set on a new car that does have a tendency to depreciate quickly then GAP cover is probably a good idea.

Types of GAP insurance

There are several different types of GAP insurance – but we tend to provide access to two types:

Combined return to invoice GAP

Combined return to invoice GAP insurance pays you the difference between the motor insurers ‘market value’ settlement at the point of ‘total loss’ and the original invoice price you paid, or the amount outstanding on finance, whichever is the higher.

Contract hire and lease

Contract hire and lease pays the difference between your motor insurers settlement and any outstanding rental/lease payments you may have. This policy is for you if you hire or lease a vehicle and you can take an option of covering any upfront lease or rental payments up to £3000.00.


  • No, it’s not a mandatory insurance like car insurance. It’s your decision. but it’s important to remember that if you buy a new car and then it’s written off or stolen the amount you get back from your insurance company may well be considerably less than what you paid for it. If you’re worried about this ‘gap’ in your financial arrangements then you should consider GAP insurance.

  • A comprehensive motor insurance policy will pay out for a replacement vehicle on a like-for-like basis. So, if your car is two years old then you should receive a similar aged car. If one is not available then you’ll receive the book-rate of a second-hand vehicle.

  • You may purchase a policy provided you do so within 185 days of purchasing your vehicle from a VAT registered dealer, that it is less than 10 years old at the time of purchase and the vehicle has done less than 100,000 miles.

    All of the options are shown when you obtain a quote.

  • In addition to the conditions mentioned in ‘When can I buy a GAP Insurance policy?’ and the full list contained in the policy wording, a brief summary would be:

    • Vehicles not registered and principally used in the UK.
    • Vehicles which have been modified in any way from the manufacturer’s specification.
    • Vehicles not covered by comprehensive motor insurance.
    • Vehicles used; as a goods vehicle, as an emergency service vehicle, for self-drive hire, public or private hire (unless included in definitions above) or is designed to carry more than 8 people including the driver.
    • Left hand drive vehicles.
    • The following vehicle makes; Bentley, Bristol, Cosworth, De Tomaso, Dorchester, Ferrari, Ginetta, Lamborghini, Lancia Thema, Maserati and Rolls Royce.
    • Any commercial vehicle over 3500kg.
  • Yes, the policy wording explains in detail all the exclusions. However, the most common reasons a GAP policy will not pay out are:

    • If your main motor insurance policy insurer refuses your claim.
    • If a fraudulent claim is made.
    • If you decline an offer of a replacement vehicle under the terms of your motor insurance policy, then your GAP insurance will settle your claim based on the value of the replacement vehicle and not the settlement figure offered under your motor insurance policy.
  • Not all comprehensive insurance policies provide cover if insured vehicles are hit by an uninsured driver, so it is best to check your policy.

    Our GAP insurance is conditional on your main motor insurer settling your claim in the event that the vehicle is written-off. Provided they do, and you follow our claims procedure, then we will also make a settlement.

  • It would be wise to consider the possibility that there may be instances where your insurer reduces your settlement to market value only. This can be for a variety of reasons, which include things like exceeding the annual mileage limit pro rata, adverse condition of the vehicle, because the vehicle has been stolen rather than being involved in an accident, or if a replacement vehicle cannot be sourced within a certain number of weeks of the incident. In addition, it should be noted that you will not be able to effect one of our GAP policies after 185 days have passed since you purchased your vehicle. If you do not have GAP insurance, you could be left with a shortfall.

Get in touch

Speak directly to our team
01603 649650
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Make an enquiry