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Is GAP insurance worth it?

gap insurance

Guaranteed asset protection (GAP) insurance ensures that you receive extra money if your car is stolen or written off*. It can give you peace of mind, and make sure you’re not left out of pocket should the worst happen to your vehicle. But is taking out a policy the right decision?

If you're wondering whether GAP insurance is worth it, check out our guide below. We'll answer your questions, separate the fact from the fiction, and help you come to an informed decision.

What is GAP insurance?

If your car is stolen or written off, your car insurance provider will give you a 'total loss payout', which is usually equivalent to the market value of your vehicle at the time. Because cars depreciate quickly, it's likely you'll receive much less than what you paid for the vehicle originally. This means you might not have enough to pay off your car finance.

GAP insurance allows you to claim more money should your car be written off*. The amount you receive will depend on the type of policy you take out.

With our RTI GAP insurance, you can claim up to £50,000. We will give you the difference between your car insurance total loss payout and the amount you originally paid for your car, or the amount left outstanding on your car finance — whichever is greater*.

Should I take out GAP insurance?

GAP insurance is not compulsory, but with our cover costing less than £10 per month and suitable for vehicles of any age and mileage, it can be a cost-effective way to enjoy peace of mind and protect your finances.

GAP insurance is particularly beneficial if you buy your car on finance. Because vehicles depreciate quickly, you're likely to be in negative equity from the minute you drive from the forecourt until you near the end of your loan period. As such, a total loss payout equivalent to the market value of your car is unlikely to cover the early settlement amount for your car finance. You'll be left making repayments on a car you no longer own, and may be unable to afford a replacement car.

However, if you have a GAP insurance policy that pays off the remainder of the loan for you, there will not be any debt to worry about. Your monthly repayments budget can then be reallocated to a new car.

If you do not have a car loan, a total loss payout should leave you with enough to buy an equivalent vehicle outright. However, adding return-to-invoice GAP cover means you'll have the full original purchase price of your vehicle back, so you can invest in a better replacement. Please note that normal GAP policies don't offer this benefit.

What are the chances of my car being written off?

Cars are written off when they are stolen or damaged beyond worthwhile repair — usually due to a major collision, fire or flood.

  • There were 84,355 vehicle thefts in England and Wales in the year to June 2016, according to the Office for National Statistics.
  • Approximately 450,000 cars are written off through accident damage in the UK every year, according to HPI Check.

How much do cars depreciate?

The market value of the average car drops by 15–35% in the first year and up to 50% or more within three years, according to The Money Advice Service.

If you buy a car outright for £20,000 and it's written off 12 months later, you may receive a total loss payment of just £13,000 from your car insurer. With an MG&G Direct RTI GAP insurance policy, you would receive the extra £7,000* on top of this payout.

If you buy a car on finance for £20,000 and it's written off 12 months later, you may receive a total loss payment of just £13,000, but owe much more to your lender (this will depend on your interest rate and loan term). With an MB&G Direct GAP insurance policy, you would receive the extra cash you need to settle the debt*.

Where can I buy GAP insurance?

GAP insurance will usually be offered to you by the dealership a few days after you purchase your car. However, the Financial Conduct Authority (FCA) recommends shopping around. You can usually get a better deal by coming to an independent provider like us.

Whoever you go with, make sure they are authorised by the FSA (Financial Services Authority). You should also read the policy terms carefully to ensure you are getting the right type of cover.

When should I buy GAP insurance?

Most cars (especially new cars) begin depreciating from day one, so it's a good idea to get GAP insurance cover as soon as possible after buying your vehicle.

So…is GAP insurance worth it?

Our RTI GAP insurance is guaranteed* to make sure you’re not left out of pocket if your car is declared a total loss, whether you bought it on finance or not. That means you can enjoy a silver lining of up to £50,000 should your vehicle be written off following a theft, fire, flood or accident.

We offer cover on cars of any age, engine size and mileage. Read the Key Facts and policy terms for more information, or get in touch with our friendly advisers on 0191 258 8199 or

*Subject to terms.

RTI GAP Insurance from MB&G Direct

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