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Guaranteed asset protection (GAP) insurance - is it right for you?

Should you buy GAP with your next car? We run through the pros and cons to help you decide

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Should you buy guaranteed asset protection (GAP) insurance?

If you want to drive a car on a British road, you need to be insured. That’s the law. While basic car insurance is a necessity for all UK drivers, there are other ‘extra’ policies that you can take out voluntarily.

One such form of car insurance is known as ‘GAP’ or, to give it its full name, ‘guaranteed asset protection’. It’s technically a good idea. Though it’s not suitable for everyone and does come without some downsides.

Thankfully, cinch is here to help. Here's everything you need to know about GAP.

What is guaranteed asset protection (GAP) insurance? If your vehicle is stolen or written off after an accident of some kind, your insurance policy will pay you the value of the car. Great news, right? Well, perhaps. The car’s gone, so it’s good you’ve got the money for it. The trouble is, you’ll only receive the current market value of the car before it was so cruelly taken from you. That’s all well and good, but the depreciation will likely leave you out of pocket.

GAP insurance is a second policy that runs alongside your ‘main’ insurance and sees to it that in the event of having to cash in on your insurance policy, you’re not down on the deal.

It pays out the difference between what your insurer will pay out on the current value of the car and the amount you actually paid for it. Let’s say you spent £20,000 on a brand new hatchback. Three years later it’s written off, with its retail value at, say for argument's sake, a mere £10,000. Your insurer pays you £10k. The GAP policy pays out the remaining £10k.


●      You won’t lose money in the event you need to claim - A fairly obvious one this, but worth reiterating. If your car is stolen or written off, you’ll have the full price you paid sent to you.

●      You can cover yourself for ‘contract hire’ agreements - Write off a car on hire purchase and your insurer will only cover the current market value, as with any car. Claim your GAP on a contract hire vehicle and you’ll get the purchase price, meaning you won’t owe the company you got the car from a sizeable sum.

●      You’re buying a new or nearly-new car - The huge hit in depreciation that comes with buying new leaves motorists at risk of receiving significantly less than the value of the car should anything happen in the first few years. Guaranteed asset protection bridges that ‘gap’.

●      The car is likely to depreciate quickly - It’s not only brand new cars that lose value. You may have bought a used car that you anticipate will shed value quite early up front. If that’s the case, GAP insurance makes sense.

●      You owe funds to a car finance company - Whether you’ve a specific car finance deal or just a personal loan from a bank, your lender won’t care if the car’s stolen or written off. They’ll want paying in full. Receive a standard insurance payout to the current value of the car sometime after purchase and you’ll find yourself paying back a high rate for a car you don’t even own anymore. GAP pays out the difference and keeps you in the black.


●      Cost - The obvious downside here is the additional financial implication. Alright, so you’ll be covered in the event of a major problem, but with less than 1% of cars being written off a year, it’s highly likely you’ll not need to cash in on the policy. A GAP agreement might buy some peace of mind, but it comes at a price (literally). It’s also worth checking prices. GAP policies sold by car dealerships can be overpriced, with anywhere up to half the fee going to the salesperson in commission. It’s often wise to buy from a specialist broker who takes a smaller cut.

●      It may be unnecessary - Overly cautious car owners who drive little and store their car in a garage may get talked into a GAP agreement when there really isn’t really much point. Be sure before you sign up that there’s value for money on offer to you in your specific situation.


If you can afford it, then, GAP insurance really does look like a worthwhile investment for most people. But, of course, plenty of motorists have been driving for years without it, so do think hard before making the decision. Prices will vary depending on the value of your car, naturally, so it'll be best to get some quotes and calculate whether you'll be able to comfortably cover them off.

Handily, you can keep the spend within your budget when it comes to the car on cinch, because our range of all-online machines includes everything from sub-£10k hatchbacks to high-end supercars. Find your perfect next car here.

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