Car dealers are ripping off buyers with GAP insurance products, claims one specialist insurer.
Dealerships are selling Guaranteed Asset Protection insurance to car buyers for up to ten times more than an equivalent policy from a specialist GAP insurance company.
One car buyer bought a Mercedes-Benz A180 CDI Sport for £20,000 and was quoted £1,000 for GAP insurance from the dealership, compared to an equivalent quote from a specialist GAP insurance company, like InsuretheGap.com, for only £108.73.
Another bought a Volkswagen Polo, costing £13,400, and was quoted £432 (or £8.99 for 48 months) by the dealership, compared to an equivalent quote from InsuretheGap.com for £98.88.
The analysis by InsuretheGap found that, of 90 customers surveyed, all were quoted more for a dealership GAP policy than if they had bought one direct from InsuretheGap, for instance. Across the range of vehicles, the average dealership quote for GAP insurance was £467 and the average InsuretheGap quote was £131, a saving of 72%.
When a car is stolen or written off, the insurance company will only pay what the car is worth at the time. A GAP policy covers the difference between the current market value of the car and either the price that was paid for it originally (Return to Invoice GAP); the amount owed on finance (Finance GAP); or a combination of the two (Combined Total Loss GAP) for those who paid a deposit as well as using a finance option.