To find the right car gap insurance, think about:

  • What type of gap insurance policy you need

  • What cover you need, e.g. length of policy and claim limit

  • Whether gap insurance is worth getting

What type of policy do you need?

There are four types of gap insurance policy you can get:

  • Return to invoice gap insurance: This covers the difference between the amount you paid for your car and the motor insurance pay out you get if your vehicle is written off.

  • Vehicle replacement gap insurance: This covers the difference between the amount your car would cost to buy new at the time of a claim and the insurance pay out.

  • Return to value: This covers the difference between the market value of your car when you bought it and the amount you get from your car insurer if you claim.

  • Finance gap insurance: This covers the outstanding balance you owe to a finance company if the insurance pay out does not cover your debt.

Which one you choose depends on how you bought your car, and whether or not you want a brand new replacement if your car is written off.

What cover do you need?

When you know which type of policy is best for you, get quotes after looking at the:

  • Cover amount: The maximum the policy will pay out when you claim, e.g. £50,000

  • Length of cover: How long the policy will last for, e.g. up to five years

  • Length of ownership: How long you can have owned the car for, e.g. 12 months

Some insurers only cover cars bought from a dealership.

Do you need it?

Gap insurance means you need to pay a second premium on top of your car insurance, so think carefully about whether it is worth the cost.

Some car insurance policies offer replacement cover for new cars less than a year old, so gap insurance might not be worth it if you have this.

However, if you write off your vehicle, and do not have replacement cover, the total loss car insurance payout could be much less than what you paid for your vehicle.

Here is how to decide whether you need gap insurance.