Car owners are being urged to look into a new type of motor insurance – GAP insurance. The Guaranteed Asset Protection (Gap) policy covers the difference between outstanding finance and the potential market value of the vehicle if the car is involved in an accident and has to be written off.
Thatcham, the motor insurers testing centre for vehicle safety, found that despite 85 per cent of accidents being low-speed collisions (such as car park shunts) a six miles per hour impact, which pushed the car into another, could cause front and rear damage of over £4,600.
For motorists who are suspicious that taking the extra cover might invalidate their motor insurance policy claim, Andy Bendell, the marketing director at internet site click4gap.co.uk, says: The insurance companies refer to independent valuations, they don’t create their own valuations.
"The two most common standards in the UK for valuing a vehicle are Parker’s Guide and Glass’s Guide. If anybody’s made a claim on their car they can ask the insurer where the settlement figure came from, and that figure would normally have come from either Parker’s or Glass’s Guide. And we use the exact same guides when valuing a vehicle. Because these independent standards are in place the customer is assured of correct valuations."
So, if you need to mind the gap – between purchase price and the time when the mileage and usage starts to reduce the achievable resale value – then it may be worth researching the policy cost.