Check your car insurance policy
Check whether your comprehensive car insurance policy includes new vehicle replacement cover (new for old insurance) or agreed value cover as both would mean you don’t need GAP insurance.
GAP insurance
Compare cheap quotes on GAP insurance.
What is GAP insurance?
GAP insurance, officially known as Guaranteed Asset Protection insurance, is a financial safety net for your car. It pays out the difference between your insurance pay-out and either the original value of your car or your remaining loan balance.
💡 Top tip:
The value of a brand new car can decline by up to 60% over the first three years, assuming that you’re driving about 10,000 miles a year, which can make GAP insurance a worthwhile investment.
Why might I need GAP insurance?
If your car gets written off or stolen, your car insurance company will usually pay out the market value of your car. That may be less than what you still owe on a car loan or lease, or even the cost of replacing the car like for like.
GAP bridges this gap. This means you can replace your car without a financial setback.
GAP may be particularly helpful if:
You made a small initial up-front partial payment for your car (often referred to as a low down payment)
You have a long-term car loan or lease
You have chosen a brand new car (which will depreciate more quickly than a used one)
The particular make and model of your car is known to have a high level of depreciation
How does a GAP insurance policy work?
GAP insurance works alongside comprehensive car insurance. If your car is written off or stolen, once your car insurance provider settles your claim your GAP insurance will usually pay directly to your car finance provider (such as a leasing company) to clear the remaining loan or lease.
For example, you buy a brand new car for £20,000. A year later, the car is worth £12,000 so your insurance company pays out £12,000. GAP insurance then pays the difference of £8,000.
Here’s a step-by-step guide on how GAP insurance works:
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Choose your cover level
If you decide GAP is right for your circumstances, the level of cover you opt for will determine what's covered in your policy.
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Buy GAP insurance
GAP insurance usually must be bought within a year of buying the car.
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You’re covered for the policy term
Your cover will remain active as long as you keep up with your payments. The policy term is often three years but some GAP providers may go up to five years.
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Contact your car insurance provider
If your car is written off or stolen you need to make a claim on your car insurance before you can claim on your GAP insurance.
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Contact your GAP insurance provider
Contact your GAP insurance provider prior to accepting any settlements, and remember that they may not pay you directly. If you have a car loan or finance agreement the pay out will go to the finance provider.
What types of GAP insurance can I get?
There are multiple different types of GAP insurance for you to choose from.
Return to invoice
Return to invoice cover pays the difference between your car insurance provider's total loss payment and the exact price you paid for the car when you first purchased it. So, for example, if the invoice you have from a car dealer shows £25,000 and the payout from your insurer is £15,000 then GAP insurance should pay out the £10,000 difference. You usually need to purchase a return to invoice policy within six months of buying your new car.
Vehicle replacement
Vehicle replacement cover pays the difference between the insurer’s total loss payment and the cost of replacing it with a new car of the same make, model, and specifications
Return to value
Aimed at those who buy a car second-hand, return to value cover pays the difference between your insurer’s maximum payment and the value of the car when it was new
Combined return to invoice
This type of policy combines return to invoice with finance cover. Your insurance provider will cover you for whatever is higher - the original price you paid for your vehicle or your outstanding finance settlements. For example, you bought a car for £25,000 and financed £20,000 of the purchase. If your insurer paid out £15,000 then GAP insurance would cover the £5,000 you owed the finance company and the remaining £5,000 you had paid yourself at the time of purchase.
Contract hire
Also known as lease cover, this type of cover will meet any remaining pre-determined repayments linked to your leasing agreement. For example, if you lease a car worth £15,000 and it’s written off, contract hire GAP covers the remaining lease payments. In some instances, it can also protect the deposit you pay at the start of the contract.
Finance cover
This type is designed to clear outstanding debt if you bought the car with a loan. If your car insurance pay-out isn't enough to cover your debt, GAP insurance will cover the difference. For example, if you bought a car for £20,000 on finance and your car insurance pay out was £15,000, the GAP insurance payout would cover the difference.
What does a GAP insurance policy cover?
GAP insurance is designed to cover the difference between your car insurance pay-out and, depending on the type of policy, the value of your car.
It will be activated once your car has been written off or stolen and you have been given an offer by your car insurance provider. Depending on your policy, GAP insurance will cover one of the following expenses if your car insurance pay-out falls short:
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The price you paid for the car when you first purchased the vehicle
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The value of the car when it was new (aimed at second hand vehicles)
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The cost of replacing your car with one of the same make, model, and specification
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The cost of the remaining payments of your lease or the remaining debt on the loan you purchased your car with
How much does GAP insurance cost?
GAP insurance policies differ in price quite drastically depending on your vehicle and the terms of your policy. Some factors that will have the greatest impact on your policy's cost include:
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The value of your car
The value of your car - including the make, model, and age - will affect the cost of your policy.
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Excess
A higher excess usually means cheaper premiums but make sure you choose an affordable excess.
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Type of GAP insurance
The different types of GAP insurance are priced differently because the pay-outs are valued differently.
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Policy length
The longer you want your GAP insurance policy in place, the more expensive it becomes.
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Mileage
GAP insurance for an older, higher-mileage vehicle will be more expensive than a newer model and cars above a certain age or mileage won’t be eligible for GAP insurance at all.
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Add-ons
If you opt for add-ons, like tyre and alloy wheels insurance or scratch and dent insurance, it can raise the price of your GAP insurance.
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Where you buy GAP insurance
If you purchase your car from a franchised car dealer they may try to sell you GAP insurance but it’s worth comparing the price of this against buying it separately from a standalone provider.
Does GAP insurance have exclusions?
Here are some of the most common GAP insurance exclusions you will come across:
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Non-comprehensive car insurance
GAP insurance relies on you having an initial payout from your comprehensive car insurance.
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Non-named drivers
GAP insurance works in conjunction with your car insurance so applies to drivers named on your car insurance policy.
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Drivers without a valid licence
It is essential to have a valid driving licence to take out GAP insurance.
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Driving under the influence
If you drive under the influence of drugs or alcohol your car insurance will be invalidated and so will your GAP insurance.
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Non-standard modifications
If your car has been modified from the car manufacturer’s original specification you won’t be able to get GAP insurance.
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Repairable damage
GAP insurance only pays out if your car is a total loss (written off), not if it has damage which can be repaired.
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Old or well-travelled cars
GAP insurance generally covers cars up to 10 years old but some policies may only cover cars up to 7 years old. There’s also likely to be an upper mileage limit or an annual mileage limit.
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Business vehicles
If you have a company car then your company will be responsible for covering any shortfall if your company car is written off or stolen.
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Vehicles not in Glass's Guide
Insurers typically use Glass’s Guide, a vehicle valuation tool, to determine a car’s value and they will avoid cars which are hard to value because they’re not listed in any guides.
Is GAP insurance worth it?
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Reasons to take out GAP insurance include:
Your car is no longer worth enough to pay off your finance loan or leasing agreement
You want a brand new car if yours is written off or stolen
Your car is an expensive model that depreciates quickly
You don’t have the savings to pay off a car finance company if your car was written off
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Reasons not to take out GAP insurance include:
Your car is less than 12 months old and you have fully comprehensive insurance which includes new car replacement cover within the first year
You’re not bothered about getting a brand new replacement vehicle
You have a used car on which your insurance pay-out will not be much different to the price your paid for it
What add-ons can I get with GAP insurance?
GAP insurance doesn’t include the below as standard. A dealer or insurance provider may offer a bundled deal.
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Scratch and dent insurance
Covers minor cosmetic damage to a car's bodywork, including small scratches, dents, and scuffs, and chips to the paintwork or bumpers.
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Tyres and alloy wheels cover
Includes minor cosmetic damage such as dents and scratches, punctured, flat, or damaged tires, and impact damage from potholes, kerbs, and other hazards.
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Total loss courtesy car cover
If your car is written off and you don’t have a courtesy car from your insurer, it may be possible to get one for a set period of time through a GAP insurance provider.
Frequently Asked Questions
Can I get GAP insurance at any time?
Unfortunately, you can't buy GAP insurance at any time. Most GAP insurance providers won't allow you to buy a policy if it has been more than 12 months since you first bought your vehicle.
Some providers have an even shorter deadline than this, requiring you to purchase your GAP insurance policy within the first 180 days of purchasing your vehicle.
While this can be worrying, the good thing is that many providers will allow you to defer the start of your policy providing you actually purchased it within the deadline.
Can I get GAP insurance on a used car?
Yes, you can get GAP insurance for a used car, but it might not be as beneficial as buying it for a new car. GAP insurance is designed to cover depreciation in the value of a car and new cars depreciate faster than used cars, so GAP insurance is more commonly associated with new cars.
If you buy a used car, the gap between what you paid for it and what your insurance pays out will be smaller. This means that GAP insurance may not be as useful for used cars.
How long do I have to add GAP insurance after purchase?
The amount of time you have to add GAP insurance after purchasing a car depends on the type of policy and the age of the car.
You can buy gap insurance for a used vehicle for up to 180 days and up to 365 days with a new car after taking delivery of your vehicle.
How does contract hire GAP insurance work?
Contract hire GAP insurance covers the difference between what your car insurance company pays out if your car is written off and the outstanding amount you still owe on your contract hire agreement.
It ensures you aren't left with a large bill even if your car is written off in an accident and essentially "fills the gap" between the insurance payout and the remaining lease payments you would otherwise need to make.
Does GAP insurance ever include courtesy car cover?
Yes, it’s possible to get courtesy car cover bundled in with GAP insurance but it’s not standard. There will be a set period of time that you can have a courtesy car for.
What happens if I pay off my loan early — does GAP insurance refund me?
Yes, it’s usually possible to get a pro-rate refund, depending on how much time is left on your policy and the type of GAP insurance policy you have. It’s best to check your policy documents or speak to your GAP insurance provider to find out.
Our expert says…
GAP insurance certainly has its benefits, especially for new car owners, but it has caused controversy in the past. In 2024, the Financial Conduct Authority (FCA) had to intervene on the sale of GAP insurance, following concerns that insurers weren't providing "fair value" to consumers.
As a result, the FCA introduced new rules regarding how GAP insurance can be sold, including clearer disclosure of costs and benefits, and limitations on commissions. This makes it a safer bet if you're considering purchasing it now rather than in the past.
Sarah Tooze Car & Van Insurance Expert
Trusted Service Awards Winners
MoneySuperMarket has won the Feefo Platinum Trusted Service Award, an independent seal of excellence, which recognises businesses that consistently deliver a world-class customer experience.
Do I need GAP insurance on a lease car?
Leasing, also known as a Personal Contract Hire (PCH), is normally used to purchase new cars, and new cars with a fast rate of depreciation are what GAP insurance was primarily designed for. While it's not a requirement to have GAP insurance for a lease car, it has some great advantages.
Personal contract hire GAP insurance can cover the remaining cost of your lease payments if your car insurance pay-out falls short. This means that you don't have to worry about being saddled with unexpected costs on top of the loss of your vehicle.
Do I need GAP insurance for a car on finance?
If you have Personal Contract Purchase, Hire Purchase, or Conditional Sale agreement, you aren't required to purchase GAP insurance. But a GAP insurance policy can be a great benefit.
With finance cover GAP insurance, your policy will ensure that the rest of your loan is cleared if your car insurance is unable to cover the full amount. This prevents you from being in debt after losing your car, which only adds to the difficulty of finding a replacement vehicle.
What is the different between GAP insurance and car insurance?
The purpose of car insurance is to reimburse part of the total value of your car if something happens to it, as well as cover the cost of repairs and claims of liability if you are involved in an accident. GAP insurance, on the other hand, pays out to cover the difference between what your car insurance provider will pay out and what your vehicle was originally worth. You cannot claim on GAP insurance policy without first making claiming on your car insurance.
Does GAP insurance cover the full amount for my vehicle?
No. GAP insurance will not cover the full value of your vehicle if it is written off or stolen. GAP insurance will not pay out anything unless you have made a successful car insurance claim, so your car insurance will always cover most of the value of your vehicle.
GAP insurance also has a claim limit, which you will find in your policy details. GAP insurance will only ever pay out up to this limit, even if it doesn't cover the total difference between the original value of your car and your car insurance pay-out.
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Our comparison service is, and will always be, free to use.
Why should I use a price comparison website?
One of the best ways to get the lowest prices and best deals is to compare quotes from different companies. We do the work for you, comparing quotes side-by-side and giving you all the information you need so you can choose the right deal for your needs and your wallet.
We don’t give recommendations or financial advice, but we give you clear information so you can choose financial products that suit your circumstances.
Does MoneySuperMarket work with all the providers on the market?
No, not every company can be included in our service. This is because some companies don’t want their products included on comparison sites, and some decide that they would rather not pay a fee. There are also a few smaller providers who can struggle to cope with the volume of customers that can find their products if they appear on MoneySuperMarket.
Our goal is to search deals from as wide a range of companies as possible so that you can choose the deal that suits you.
Is GAP insurance eligible for SuperSaveClub and rewards?
No, at this time GAP insurance is not an eligible product for unlocking our SuperSaveClub rewards. It is also not included in our Price Promise.
Reviewed on 11 Dec 2025 by
YouGov Survey 1st July 2024 to 30th June 2025. Net Recommend score derived from “Which of the following online service websites would you recommend to a friend or colleague, or tell them to avoid?” Base: Current Customers of (MoneySuperMarket n=18,382, Compare the Market n=16,802, Go.Compare n=10,162, Confused.com n=8,229, Uswitch n=528).