Stupid question?

[heidi83]

I know this may be a silly question but it's my first car and I've not got much experience with insurance LOL

My question is: I bought my car on finance and I have Gap insurance. I bought the Gap insurance with the dealer and it is under written by AXA - my normal road insurance is fully comp from Marks&Spencers (Who I'd recomend to anyone) - in the event of an accident and the car is written off, who do the insurers pay the money too (both Gap and normal)? Me or direct to the finance company


It's just been something I've been thinking about and I've asked other people and nobody seems to know LOL!

Thanks for any time guys

[Trojan1401]

Hi,

The Gap policy is separate to the motor insurance policy and also to the finance. The agreement is between yourself and Axa. If you read the T&Cs you'll probably find that it is for a fised amount which will allow you to purchase a new vehicle of a similar make and model. However as you have finance on it, you would need to pay the full finanace balance.

Basically, this type of insurance protects you against any shortfall between the insurance payout and the finance settlement figure but possible provides a higher payout to allow the purchase/finance of a new vehicle. It is therefore not an indemnity policy as a motor policy is.

A point to note though that generally if a car is less than 12 months old, your motor insurer will provide a new car in the event of a write off. Check your policy to be certain.

Such policies are not a bad idea especially if you plan to keep the car for 3+ years however please read the policy carefully to ensure that it is not just the difference between market value and finance settlement but will enable the purchase/finance of a new car.

Hope this is of help.

[gwc1000]

Originally Posted by Trojan1401

Such policies are not a bad idea especially if you plan to keep the car for 3+ years however please read the policy carefully to ensure that it is not just the difference between market value and finance settlement but will enable the purchase/finance of a new car.

I agree some policies are very good value. Recently I managed to negotiate a policy through a very respectable insurance company for somebody purchasing a Mercedes CLS 320CDI retailing at £40,895 which covered the purchaser for three years for any insurance payout shortfall of the original price for the FULL purchase price. So, if in two years say they had their car stolen and their insurance company only paid them out £20,000, (a typical value of the car in two years time) the gap insurance would pay the owner the balance between £20,000 to £40,895. The price to the customer was £490. Thats £490 for three years, not £490 per year. Incredible value considering it lasts for three years and the customer knows that in the event of fire, theft or insurance total loss they will be entitled to all of his money.

[heidi83]

Originally Posted by Trojan1401

Hi,

The Gap policy is separate to the motor insurance policy and also to the finance. The agreement is between yourself and Axa. If you read the T&Cs you'll probably find that it is for a fised amount which will allow you to purchase a new vehicle of a similar make and model. However as you have finance on it, you would need to pay the full finanace balance.

Basically, this type of insurance protects you against any shortfall between the insurance payout and the finance settlement figure but possible provides a higher payout to allow the purchase/finance of a new vehicle. It is therefore not an indemnity policy as a motor policy is.

A point to note though that generally if a car is less than 12 months old, your motor insurer will provide a new car in the event of a write off. Check your policy to be certain.

Such policies are not a bad idea especially if you plan to keep the car for 3+ years however please read the policy carefully to ensure that it is not just the difference between market value and finance settlement but will enable the purchase/finance of a new car.

Hope this is of help.

Ah right I see - now. I thought the gap insurance was something a bit different. Thanks for clearing that up!

So all insurance monies would paid directly to me and I pay off any outstanding finance money out of it? That sounds right doesn't it?

[Trojan1401]

The Gap policy is a seperate insurance policy however, the likleyhood is that they would ask if any outstanding finance and deal with that aspect direct. There may infact be such a clause in the policy.

[heidi83]

Originally Posted by Trojan1401

The Gap policy is a seperate insurance policy however, the likleyhood is that they would ask if any outstanding finance and deal with that aspect direct. There may infact be such a clause in the policy.

Right OK,
I'll have to request the policy details anyway as I can't find them anywhere, apparently I may be able to get it cheaper elsewhere after reading a few things on this forum! - Thanks for the help