PCP / Gap insurance vs 'new for old'

CampervanTime · Mar 2, 2018

Hi Everyone

I'm just wondering what others have done when they have bought their new Calis over the years.

We are buying on a PCP and have previously had GAP insurance on cars we have bought this way before, mainly to cover any negative equity situation we might be in, towards the start of the contract mainly. We don't anticipate that issue with the Cali because of the deposit we're putting in specifically but would want to be able to replace our Cali with another the same if the worst happens.

It looks likely that the insurance company we will use will give us 'new for old' for the first 2 or 3 years, or 15k miles. That's great, but I wondered if others have bought GAP as well, or bought it and deferred the start date of it by 1 or 2 years? I was thinking of buying a 2 or 3 year GAP policy and then deferring the start of it by 18 months (ALA / Gapinsurance.co.uk can do that), as then it would give me continued cover after the insurance 'new for old' runs out.

Thoughts?

andyinluton · Mar 2, 2018

I bought 5 year back to invoice GAP cover when I got a porsche 911 it was literally a few pounds more than a 3 year policy. on a £50k car it cost about £300.
What most people don't realise is that if you sell the vehicle early & haven't made a claim you can cash in the policy for a pro-rata refund.

New for old is better cover as it covers any price increases. You do need to check as to what the GAP payout covers - back to invoice only pays the difference between insurance payout & original invoice so may not cover all the interest charges depending on how you've financed the van.

iamchucky · Mar 2, 2018

Purchased Cali in 2016 and we had new for old on our insurance to cover the first 2 years/First 15k. Also took out an ALA policy for 5 years at time of purchase (they'd only allow us to defer the policy for 6 months back then) - policy we took out was a vehicle replacement (ie. would fund the difference between insurance payout and replacement cost of new vehicle).

GAPinsurance · Mar 3, 2018

itguy said:
It looks likely that the insurance company we will use will give us 'new for old' for the first 2 or 3 years, or 15k miles.

Which insurance company is that? Almost all motor insurers that provide new-for-old cover do so for a one year period and I'm only aware of SAGA and NFU that provide any longer with them both doing it for 2 years. A 12,000 mile limit applies to the 2nd year of the SAGA policy though (e.g. once it's covered 12,000 miles you no longer have the benefit of their new-for-old cover).

I'm not aware of any motor insurer offering new-for-old cover for 3-years nor with a limit up to 15,000 miles. It'd be useful to know who that is then.

itguy said:
I was thinking of buying a 2 or 3 year GAP policy and then deferring the start of it by 18 months (ALA / Gapinsurance.co.uk can do that), as then it would give me continued cover after the insurance 'new for old' runs out.

The ALA website states that they don't allow the start date of their GAP insurance policies to be deferred. You should check that with them if you're intending to buy from them.

We DO allow you to defer the start date of the GAP insurance policy though, but only by a maximum of one-year from when the vehicle was first registered (not 18 months) but, you should only consider this if you're absolutely certain that the cover provided by your motor insurer in the first year is up to scratch.

Read this blog article here for more details. It was written a while ago now but, the basic principle remains valid.

Something else to consider too is that your motor insurance policy terms will almost certainly state that they'll only replace the vehicle if (among other criteria) anyone who has an interest in the vehicle agrees. By this they're referring to the finance company. E.g. the finance company has to agree to the motor insurer replacing the vehicle rather than making a financial settlement. This being the case, if you're intending to rely on your motor insurer's new-for-old cover for *any* period of time, you should check in advance with the finance company whether they'd be inclined to accept a physical replacement vehicle... if they wouldn't accept it, you'd then need to check with the motor insurer to see how they'd calculate the financial settlement in the event the finance company rejecting the offer of a physical vehicle...

The issue being of course is that they may well revert to a Market Value payout rather than say, a payout based on the invoice price or equivalent cost of replacement.

All in, the fact that your/any motor insurance policy states that it covers a car on a new-for-old basis doesn't in itself mean that you should dismiss the notion of having GAP insurance in the first year. As with anything, the devil is in the detail and in this case, some of that detail isn't always particularly obvious.

If you (or anyone else reading this) wants assistance in deciding whether or not to have GAP insurance in the first year of ownership, please get in touch. We'd be more than happy to talk through your options.

HTH

David

WelshGas · Mar 3, 2018

GAPinsurance said:
Which insurance company is that? Almost all motor insurers that provide new-for-old cover do so for a one year period and I'm only aware of SAGA and NFU that provide any longer with them both doing it for 2 years. A 12,000 mile limit applies to the 2nd year of the SAGA policy though (e.g. once it's covered 12,000 miles you no longer have the benefit of their new-for-old cover).

I'm not aware of any motor insurer offering new-for-old cover for 3-years nor with a limit up to 15,000 miles. It'd be useful to know who that is then.

The ALA website states that they don't allow the start date of their GAP insurance policies to be deferred. You should check that with them if you're intending to buy from them.

We DO allow you to defer the start date of the GAP insurance policy though, but only by a maximum of one-year from when the vehicle was first registered (not 18 months) but, you should only consider this if you're absolutely certain that the cover provided by your motor insurer in the first year is up to scratch.

Read this blog article here for more details. It was written a while ago now but, the basic principle remains valid.

Something else to consider too is that your motor insurance policy terms will almost certainly state that they'll only replace the vehicle if (among other criteria) anyone who has an interest in the vehicle agrees. By this they're referring to the finance company. E.g. the finance company has to agree to the motor insurer replacing the vehicle rather than making a financial settlement. This being the case, if you're intending to rely on your motor insurer's new-for-old cover for *any* period of time, you should check in advance with the finance company whether they'd be inclined to accept a physical replacement vehicle... if they wouldn't accept it, you'd then need to check with the motor insurer to see how they'd calculate the financial settlement in the event the finance company rejecting the offer of a physical vehicle...

The issue being of course is that they may well revert to a Market Value payout rather than say, a payout based on the invoice price or equivalent cost of replacement.

All in, the fact that your/any motor insurance policy states that it covers a car on a new-for-old basis doesn't in itself mean that you should dismiss the notion of having GAP insurance in the first year. As with anything, the devil is in the detail and in this case, some of that detail isn't always particularly obvious.

If you (or anyone else reading this) wants assistance in deciding whether or not to have GAP insurance in the first year of ownership, please get in touch. We'd be more than happy to talk through your options.

HTH

David

A little more research required.

GAPinsurance · Mar 3, 2018

WelshGas said:
A little more research required.

View attachment 30571

Awesome - thank you. In our line of work we deal mainly with “normal” motor insurers for cars and light vans - I’ve not come across the Caravan and Motorhome Club Policy before.

Their 2yr new-for-old cover with no mileage limit is pretty good on face value, though I’d need to see the specific terms of the policy to understand how good the cover actually is (in reference to my other points and the issues discussed in the blog that I linked to).

WelshGas · Mar 3, 2018

GAPinsurance said:
Awesome - thank you. In our line of work we deal mainly with “normal” motor insurers for cars and light vans - I’ve not come across the Caravan and Motorhome Club Policy before.

Their 2yr new-for-old cover with no mileage limit is pretty good on face value, though I’d need to see the specific terms of the policy to understand how good the cover actually is (in reference to my other points and the issues discussed in the blog that I linked to).

I’ve used it a few years ago, but in respect of a brand new 25’ 7 berth Caravan, wiped out on its maiden trip courtesy of a coach that didn’t stop.
They apologised it took so long to replace, 6 weeks, as I had bought the last of that years model in the U.K. and had to wait for the better specced new year model to be built.

GAPinsurance · Mar 3, 2018

WelshGas said:
I’ve used it a few years ago, but in respect of a brand new 25’ 7 berth Caravan, wiped out on its maiden trip courtesy of a coach that didn’t stop.
They apologised it took so long to replace, 6 weeks, as I had bought the last of that years model in the U.K. and had to wait for the better specced new year model to be built.

It came up trumps then

I'm keen to review the policy wordings/booklet in order to determine if/how GAP insurance may or may not work alongside it but, it seems I have to have purchased a motorhome insurance policy from the Caravan Club before I can get access to it. Although interestingly, I can get access to their Caravan Insurance policy booklet without buying that.

I'll keep digging and see what I can find but if anyone reading this has a copy of their policy booklet and would be prepared to send it on to me that'd be much appreciated.