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Vehicle Replacement Gap Insurance

How it works, who can it help, claim examples and full terms and conditions.

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How this works

In the event of a write-off, Vehicle Replacement Gap will 'top-up' what your motor insurer agrees to pay - back to the price you paid for the vehicle OR the price you need to pay for an equivalent replacement if prices have increased.

If you financed via your motor dealer and the finance settlement is more than you paid for the vehicle, this cover will clear your debt. It pays up to whichever figure is the highest - your vehicle purchase price or the outstanding finance - if you have financed of course!

Who this might help

Vehicle Replacement Gap Insurance is available for dealer supplied new and used vehicles purchased with cash, personal loan or a dealer arranged HP or PCP agreements. Cover is available for vehicles less than 12 months old and under 10,000 miles at the start of the policy.

These are multi-year policies that cannot be renewed, extended or purchased again on expiry.

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A Typical Example

Let's assume you have purchased a car for £20,000.00. Two years later, it's stolen and not recovered. Your insurer agrees to pay the market value of £13,000.00. 

Let's also assume, in that two-year period, the cost of a replacement has increased by £3,000.00. In this situation, you would have lost £7,000.00 and also need to pay £3,000.00 to cover the price increase. In this example, Vehicle Replacement Gap Insurance will pay  £10,000.00 to help give you enough to purchase a replacement.


A write-off can be caused by theft, accident, fire or flood.

How Financed Vehicles Are Covered.

If your finance balance is less than the cost of a replacement at time of write-off, your finance will be settled and the surplus returned to you to use as a deposit for your next car.


If the finance balance is higher than the purchase price and it's a dealer arranged HP or PCP agreement, your finance balance will be settled leaving you debt free. 


All of the above are simple summaries and all insurances are subject to terms and conditions which can be found above.

You may have more than one Gap Insurance to choose from..
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