What Is GAP Insurance? | Stable Vehicle Contracts
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What Is GAP Insurance?

GAP Insurance could potentially save thousands of pounds if your car is written-off. Don't get caught out with a massive shortfall. This guide will explain what GAP Insurance is and why you need it.

In the case of a total write-off, GAP (Guaranteed Asset Protection) Insurance pays the shortfall between your insurance payout and your finance settlement figure.

Typically, motor insurers will provide "new-for-old" cover for new vehicles during the first 12 months of ownership. This simply means that, if your vehicle is declared an insurance write-off during the first 12 months, your insurance company will provide a like-for-like replacement vehicle. If an insurance write-off occurs after the first 12 months, things are more than likely going to get expensive.

Insurance companies will only pay out the market value for a written-off car, which is normally around the trade price. Don’t forget, as soon as you drive a new car off the forecourt it starts to depreciate in value – especially in the first few years. However, during the early stages of any finance agreement you are paying off mainly interest (much like how a mortgage works). So, you could find yourself owing more to settle the finance than the car is worth!

Benefits of our GAP Insurance

  • Defaqto 5-Star

Our Asset Protection Insurance, provided by Car Care Plan, has achieved the highest Star Rating from Defaqto. It is considered to offer one of the most comprehensive offerings in the market

  • Free Transfer

If your car is a write-off and your new-for-old policy is used, your GAP Insurance policy is transferred to your next contract hire.

  • Full Refund

Receive a full refund if your car is a write-off and your GAP Insurance policy is not used.

  • Initial Payment

Initial rental refunded in the event of a successful claim.

  • £250 Refund

Receive a £250 refund if your car is a write-off and your GAP Insurance policy is used.

Two Payment Options

  1. A one-off payment starting from £299 (this varies based on the vehicle cost and term)
  2. Spread the cost with 10 monthly payments starting from £29.90 (this varies based on the vehicle cost and term)

Our Example

Steve is involved in a crash (don’t worry, Steve’s fine) and his insurance company have declared his beloved VW Golf GTI a total write off! Bad times. Steve’s insurance company have decided that the market value of his car is currently £15,000. To settle his finance agreement, including any early termination fees, Steve needs £20,000. Very bad times!

So, Steve has a shortfall (or GAP) of £5,000 that his insurance company aren't prepared to pay out even though he needs it to settle the finance agreement. Normally, Steve would need to make up this shortfall himself… but, fortunately, Steve took out GAP Insurance.

Steve’s GAP Insurance (Guaranteed Asset Protection) company will meet any shortfall between what the motor insurance company payout and what is required to settle any outstanding finance agreement. This means that Steve isn’t out of pocket and it allows him to lease another new car. Good times!

Why would I need GAP Insurance?

GAP insurance pays the shortfall between the motor insurance payout and the finance settlement. Potentially saving you thousands.

Hopefully, this guide will have answered any questions you have about GAP Insurance. If not, please feel free to call us on 0151 728 4711. If you would like to view our latest Audi and Volkswagen contract hire offers please click here.


This guide is accurate as of 28 February 2017. This article does not constitute advice, it is for information purposes only. You should contact the finance company for personalised advice for your specific circumstances.

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