Hi

I purchased a car 2 years ago from Bristol Street Motors and the finance was through british credit trust. When i purchased the car, Bristol Street Motors told me i "had" to take out the 3 year GAP insurance at a cost of £599, otherwise i would not be able to get the finance for the car! I saw on another thread that someone had asked if they could claim back the GAP insurance and someone told them they could.

Is this correct? can i claim it back?

thankyou

There are two main types of GAP Insurance:-

1. GAP Insurance taken out within 3 months of delivery of a new car – this insurance covers the shortfall or "gap" between the insurance settlement and either the original price paid, a new for old replacement or any finance that is outstanding.

2. GAP Insurance bought more than 3 months after delivery or on a vehicle that is over 5 years old – this insurance covers the shortfall or "gap" between the insurance settlement and a Parker's Private Good valuation of the vehicle.

GAP insurance is generally required if you take out a lease agreement because although the car is still owned by the dealership or car manufacturer the lease holder is financially responsible for the vehicle. GAP insurance in these circumstances makes perfect sense because it protects the lease holder from financial loss in the case of an accident and we've all heard about people who have lost out when their vehicle has been written off by an insurance company.

However, GAP insurance is not always required, is not always suitable and can be missold. It may be missold by dealerships who want the extra money or who are ignorant and just automatically add it to the loan or lease agreement without advising the buyer of what it is or asking them if they want it.

As a consumer, you have the right to refuse gap insurance and to be given the appropriate advice.

You may not need GAP insurance if:-

-- You have adequate cash reserves to cover the shortfall between the insurance settlement and value of the vehicles, and so do not want to pay insurance premiums

-- You are already covered through your motor insurance

-- The loan agreement covers any gap in value

-- Your vehicle is heavily discounted so there would not be a gap in value

In these circumstances, you would want the option to refuse GAP insurance as it is not relevant to your circumstances. If the GAP insurance is not needed then it can be deemed to have been missold if it was added to your loan, hire purchase or lease agreement.

If you have found that GAP insurance has been added to your agreement without your knowledge, where it is not needed or where it is even invalid, then you may be eligible for claiming a refund of policy premiums paid on this missold GAP insurance policy

nicked from another site...

dx

Hi

The GAP insurance was taken out when i completed the relevant forms with the dealership. They told me i had to have it, otherwise i would not get the finance. They told me that if i had to claim if my car was stolen and written off, NOT to claim through my own insurance, but to claim from the GAP insurance because it would cover me more financially than my own insurance would. EG.... IF vechicle was written off, my own insurance would only pay "bottom book" GAP insurance would cover say if i paid £10k for the car, i would get £10k back. Don't know if this is true or not but thats what they told me. I have fully comp insurance myself, and although GAP insurance sounds good, if its true what they tell me, but if its not, then im paying 2 lots of insurance?

reclaim it!!

dx

is there a standard letter to send to claim back GAP insurance? Also, if i claimed it back successfully, the lender would obviously have to recalculate my agreement yes? Would they recalculate it for the period of time that is left (which is 3 years) or would they recalculate it for the whole 5 years?

they cannot make yousign a new agreemnet nor vary the term, it will be a restucture over the same period but at a lower PCM.

no std letters

see the stickies at the top of the forum.

dx