Mind the GAP – the cost of neglecting Guaranteed Asset Protection insurance revealed
British motorists missed out on payouts amounting to over half a billion last year by not bothering with GAP insurance.
According to GAP insurance provider Mapfre Abraxas, motorists who had their leased vehicle stolen, vandalised or written-off would be an estimated £619m better off if they had obtained Guaranteed Asset Protection insurance.
Over one in five motorists saw their lease car written off in an accident or vandalised beyond the point of financially logical repair with a number of years left on a finance or contract hire agreement.
The vast majority of these people (84%) hadn’t taken out GAP insurance, leaving them – in some cases – with a five-figure bill to settle.
Nancy Rignall, Head of Mapfre Abraxas, said: “Our research shows that unfortunately the vast majority of people who have suffered a write-off or had their car stolen didn’t have GAP insurance.
“However, after suffering an incident of this nature they are much more likely to recommend GAP to a friend than not.
“There is still a lot of work to do to persuade people of the value of GAP, but by providing clear, transparent and easy-to-use products, we believe there is room to achieve much greater penetration into the car buying population.”
Explaining why GAP insurance is such a biggie, ContractHireAndLeasing.com’s Faye Sunderland writes: “If you have a loan or leasing agreement then you could possibly have years of payments ahead of you – what happens if the car is damaged beyond repair or stolen? How will you afford the payments?
“Your motor insurance policy will usually pay out the current market value of your car at the time of the accident, not the value of the car when you first bought/leased it. If there is a difference between the amount your insurance company pays out and what you currently owe, this will be paid by GAP Insurance.”
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