Gap protection / return to invoice / vehicle replacement insurance

[hippycinq]

Hello
I am sure this has probably been covered many times before, and I have had a look at some of the more recent threads, but could someone, in very simple terms, tell me the difference between the following:

GAP INSURANCE
RETURN TO INVOICE INSURANCE
VEHICLE REPLACEMENT INSURANCE

From what I can see, every time I look at quotes, the VRI seems the more expensive option, so I am presuming is probably the better (? not necessarily..!?)..
and they seem to be recommending that on a 12700 car I should be looking at a 10k GAP amount - what does this actually mean??
And, when they say you can defer for a year 'because your insurance company might cover new for old in the first year' what exactly does this mean??
Appologies if its all been covered before and I havent found it.. or I havent found it in simple enough terms.....

 

[Most Easterly Pandas]

RETURN TO INVOICE INSURANCE & VEHICLE REPLACEMENT INSURANCE are both GAP insurance.

RETURN TO INVOICE INSURANCE - Returned to same price paid - can be taken out against new and used cars.

VEHICLE REPLACEMENT INSURANCE - Replaces the vehicle like for like, if worth more for the same spec later on this can be beneficial, if worth less then you'll make no money - can only be used on new vehicles I believe, but could be wrong.

 

[Ganger]

I got GAP insurance on my new punto, you got to ask yourself one question.. Can I afford not to have GAP insurance with my new car ?

If you have bought your car on finance/HP and you write off your car within the first year (lets say). Your normal insurance will only pay you what your car is worth at that time, but you may/still own the finance thousands and it's this bit that GAP insurance is suppose to cover.

If your buy a £3,000 car then GAP isn't really worth it but is worth getting on a £14k car etc

 

[hippycinq]

I got GAP insurance on my new punto, you got to ask yourself one question.. Can I afford not to have GAP insurance with my new car ?

If you have bought your car on finance/HP and you write off your car within the first year (lets say). Your normal insurance will only pay you what your car is worth at that time, but you may/still own the finance thousands and it's this bit that GAP insurance is suppose to cover.

If your buy a £3,000 car then GAP isn't really worth it but is worth getting on a £14k car etc

I fully intend to get the GAP insurance - it would be just my luck to write off the car on day one of 4 year finance if I didnt take it out..!! Just want to be clear what I am buying...

RETURN TO INVOICE INSURANCE & VEHICLE REPLACEMENT INSURANCE are both GAP insurance.

RETURN TO INVOICE INSURANCE - Returned to same price paid - can be taken out against new and used cars.

VEHICLE REPLACEMENT INSURANCE - Replaces the vehicle like for like, if worth more for the same spec later on this can be beneficial, if worth less then you'll make no money - can only be used on new vehicles I believe, but could be wrong.

From what you've said there then, Return to Invoice sounds like it might be the better option - will it ensure that my finance is paid off completely in the event of an accident? Presumably if I took about Vehicle Replacement Insurance and a car with the same spec new cost less than my original purchase price, I could be left with a bill from the finance company to cover the difference..? Is that right??

 

[Most Easterly Pandas]

If your buy a £3,000 car then GAP isn't really worth it but is worth getting on a £14k car etc

All a matter of opinion. If the £3k is on finance then its still worth it.

From what you've said there then, Return to Invoice sounds like it might be the better option - will it ensure that my finance is paid off completely in the event of an accident? Presumably if I took about Vehicle Replacement Insurance and a car with the same spec new cost less than my original purchase price, I could be left with a bill from the finance company to cover the difference..? Is that right??

Essentially. Although I'd seek advise from the finance company yourself. I've never brought a car on finance so never had to bother with GAP cover.

 

[Deano5665]

Just seen this thread and this much I know. If you are buying a new car on finance and during the first 12 months of ownership the car becomes a total loss, your insurance company should replace the vehicle like for like. So if you are buying a new car on HP you do not need to take Gap insurance until after the first year

 

[Most Easterly Pandas]

Just seen this thread and this much I know. If you are buying a new car on finance and during the first 12 months of ownership the car becomes a total loss, your insurance company should replace the vehicle like for like. So if you are buying a new car on HP you do not need to take Gap insurance until after the first year

I think you mean replace it with a new one (or pay out the cost there of). If so its only something they'll do if it forms part of their cover, isn't something all companies do, but some even do it for first 2 years.

Worth noting that this will only be if you're the first registered keeper, so if it's a preregistration then it won't apply to you.