Gap insurance 'more relevant for owners of new cars'

By Tom Farley, Fri 13 Jun 2008 - Published in Car Insurance

Guaranteed Asset Protection (Gap) insurance will benefit drivers buying a new car rather than those looking for a second-hand motor, according to Auto Trader magazine.

Tom White from the magazine said that people with new cars would benefit more from Gap insurance, as their vehicles will depreciate in value more rapidly compared to older cars.

He went on to advise that people should compare insurance before buying and should ensure they choose the right type.

Gap insurance cover can simply pay off the outstanding loan or it can replace the vehicle like-for-like.

Mr White commented: "We'd always recommend some element of price comparison, but also benefits comparison. There are a number of different Gap-type products sp cover will vary considerably."

It is designed to bridge the gap between a vehicle's original value and what you actually get from your car insurance should the vehicle be stolen or written off.

The AA claims that by the end of its first year, the average car has lost about 40 per cent of its original value.

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