Finance people... GAP insurance

[Belly]

Can I ask what finance rate people got in the UK from Ford? 5.8% seems a little steep
Cheers

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[marks]

Loans from car manufacturers are always going to be steep. Can get a personal loan from Sainsbury for about 3% or remortgage for about 1.5%

 

[SteveS]

So my examples are from the US, but I wanted to share.

Scenario 1
40k price with 7 k down


Scenario 2
40k pric with 1k down


6 months later there is a total loss and say vehicle is worth 30K

Scenario 1
Say your payoff is 31k. You walk away owing nothing, but you loose your 7k down and all payments.

Scenario 2
Say your payoff is 37k. You walk away owning nothing, all you loose is the 1K and payments.


Now the payments in Scenario 2 are higher, but GAP covers you better. Just trying to share (at least here in the US). The more you put down, the more YOU risk and the less GAP covers. They kind of take your money first then add there's only when yours runs out. Just cautioning you on large down payment from a rish perspective. You already know it lowers payment amounts.

Hope that helps.

Hmm, not sure I agree with that, for the UK at least. But I could be wrong; it's happened before.

My understanding was that GAP covered the difference between the insurance book value payout and the cost of replacing the car new.

For example, 40k price with ANY amount down. You total the car after six months and insurance pays out book value. GAP makes that value up to the original 40k. How the car is financed should have no bearing. For the UK at least...

:shrug:

 

[WHealy]

Hmm, not sure I agree with that, for the UK at least. But I could be wrong; it's happened before.

My understanding was that GAP covered the difference between the insurance book value payout and the cost of replacing the car new.

:shrug:

So sorry if I'm confusing the situation with US financial info. Over here, GAP covers the loan so in the case of loss and you owe more than it's worth you don't have to pay the difference. If your statement above is true and it's more like an insurance for new purchase, my example and caution of risking too much down would not apply.

 

[SteveS]

So sorry if I'm confusing the situation with US financial info. Over here, GAP covers the loan so in the case of loss and you owe more than it's worth you don't have to pay the difference. If your statement above is true and it's more like an insurance for new purchase, my example and caution of risking too much down would not apply.

Always interesting to see how things differ between countries. It's different again in mainland Europe.

 

[Stark]

This is the differences in GAP insurance here in the UK

Which Car Gap Insurance?

Finance Car Gap Insurance - If you have bought your car on a finance agreement, or by a contract hire lease, GapInsurance123 Finance Car Gap Insurance can cover the difference between the 'market value' of your car on the day it was written off (which you get from your own insurers), and the outstanding finance settlement. Another form of this would be Contract Hire Gap Insurance.

So if you owe more than the vehicle is worth, GapInsurance123 Car Finance Gap Insurance can 'bridge the gap' leaving you free to buy another car with no financial liability.
With GapInsurance123 Finance Gap Insurance, you can buy your car gap insurance at anytime during your finance agreement, so if you have had the vehicle for a year, we can still provide finance gap insurance for you.

Combined Return to Invoice Car Gap Insurance - Return to invoice Gap Insurance will cover between your car's market value, on the day it was written off and either the original invoice price you paid, OR your outstanding finance settlement, whichever is the higher

Combined Vehicle Replacement Car Gap Insurance - Vehicle Replacement Gap Insurance will cover between your car's market value on the day it was written off and either the cost to replace it with another which is the same age mileage and condition as your car was on the day you originally bought it or the outstanding finance which ever is the higher.
So if you buy a brand new VW Golf GTI in 2011 for £21,000, and the equivalent brand new model in 2014 is now £23,000, Vehicle replacement car gap insurance would cover the increase in cost and you would be paid the extra £2000.

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