The last thing that’s on your mind when you go to your local dealership to pick up your brand new car is what would happen if you wrote it off driving away from the dealership. Many people think that with fully comprehensive insurance they won’t have a problem. In many circumstances this could not be further from the truth. Many new cars will lose twenty percent of their value as soon as you drive off the forecourt, unfortunately comprehensive insurance will not cover this depreciation and you may find yourself in the situation where you need to find a few thousand just to replace your car ‘like for like’. This is exactly the situation where Guaranteed Asset Protection or GAP Insurance will protect you against this possible loss.

So how exactly does Return to Invoice GAP Insurance work? Basically as a result of your car being written off, RTI GAP Insurance will pay the discrepancy between your Motor Insurance Payout and the amount that you originally paid for the car. Let’s say you bought a new car for £19,995 and two years later your motor insurance company writes your vehicle off due to it being in an accident. Unfortunately they only offer you £10,000 as a settlement. If you have RTI GAP Insurance (Subject to the overall policy claims limit that you select when you take the policy out) GAP Insurance would pay the £9,995 difference between your Motor Insurance payout (£10,000) and the original invoice price you paid for the vehicle (£19,995).

Many people regard GAP Insurance as just another way for the dealership to get a hold of a little more of your hard earned cash. Admittedly dealerships can charge premium rates for their policies, but don’t let that put you off this insurance product. Search around on the internet and you will quickly find plenty of companies that offer Gap Insurance at rates far lower than you may have been offered by your dealer.

With over five hundred vehicles every day being involved in accidents and up to half a million vehicles a year being declared a total loss in the UK, RTI GAP Insurance is a great way to cover yourself and keep you away from that dreaded negative equity.

As with other ‘peace of mind’ insurance products, there is a good chance you may never need to make a claim, but for those who do find themselves in the position that their car has been written off and the insurance company payout falls short of their expectations, GAP Insurance can be the answer to their prayers. Everyone knows someone who has a horror story about losing money when they’ve had a car accident and in these times of the global credit crunch, new cars seem to be losing their value quicker than ever, just one more reason to consider GAP Insurance when you buy a new car. Before you sign on the dotted line in the dealership however, make sure you do your homework, search the internet and you will probably save yourself between forty and seventy percent for a similar policy.