Buying a car is often a big financial outlay, so it is unnerving that cars lose a large portion of their value so quickly.
Most cars lose up to 50% of their value in the first 3 years, and their value carries on depreciating over their lifetime. It is this depreciated value which would be reflected in an insurance payout if you made a claim on your car insurance.
Return To Invoice gap insurance sits alongside your main car insurance policy and protects you from only being able to claim your car's value at the time of an accident, topping up your initial claim to a pre-agreed value. Importantly, gap insurance Return To Invoice cover tops up whatever payout you do receive so that it equals the amount you originally paid for the car - its invoice price.
Return To Invoice insurance is available for both new and used cars, as long as you take it out as soon as you purchase your car (typically within 3 months).
Example of Return To Invoice insurance (RTI)
You buy a car for £9,000, and take out an Return to Invoice gap insurance policy within 3 months of the purchase. (This automatically sets your pre-agreed claim limit to £9,000.)
After 18 months, your car is written off in an accident and you lodge a claim with your main car insurance firm: you are paid £5,000, its value at the time of the accident.
Under a return to invoice gap insurance policy, you can claim the difference between your payout and your pre-agreed gap insurance limit, in this case amounting to £4,000. As long as your gap insurance premiums and the excess you have to pay are lower than £4,000, your return to invoice insurance will have saved you a significant amount of money.
How to compare Return To Invoice gap insurance quotes
The most important thing to do is to make sure a Return to Invoice gap policy gives you the amount of cover you need.
Most gap insurers offer different levels of cover, with each specifying maximum claim limits.If your new car is very valuable, a low maximum claim limit could leave you out of pocket if you need to claim.
Additionally, some gap insurance providers place limits on the minimum and/or maximum value of cars that they will insure - so make sure your car qualifies for each. You can compare return to value gap quotes using our back to invoice gap insurance comparison table to save checking every quote individually.
Also consider whether the policy makes a contribution towards paying the excess on your main car insurance claim, and if it includes cover for any warranty or financial product purchased alongside your vehicle.
Finally, you should check the length of each return to invoice policy against your car's record (both make and your specific model) for holding its value. If your car retains its value well, a longer gap insurance policy will be important because you don't stand to lose as much on an early claim on your main car insurance.
Some gap insurance return to invoice providers offer deferred start dates for your policy, this will extend the life of your cover for less than simply choosing a longer policy. However, you won't be able to claim on the policy during that deferral period.
If you prioritise the cover you need for your car and compare RTI gap cover for policies that fit, you'll be able to find a cheap Return To Invoice insurance quote in minutes and get the best cover around.