The theory is this... GAP insurance is not necessarily always required in the first 12 months for a brand new vehicle, because lots of Motor Insurance companies will now cover a brand new vehicle on a new-for-old basis for the first year - That is to say that in the event that the vehicle is declared a Total Loss (AKA "Written Off") before it is one year old, they will replace the vehicle on a new-for-old basis.
But is it as simple as that?
As one of the first companies (possibly the first company - it's been so long we can't remember!) to permit a GAP insurance policy to be purchased with its start date deferred by up to 12 months based on the scenario above, we've been banging on about this for years.
However, things are not always quite what they seem.
This blog article explains in more detail but, the simple fact is that putting aside the claims we've seen involving motor insurers that have blatantly disregarded their own policy terms and conditions and glossed over eligibility for a new-for-old replacement vehicle having been met, there's generally now so many caveats within motor insurance policy terms, in relation to this "new-for-old" cover that it's becoming increasingly difficult for us to confidently permit a policyholder to defer their GAP insurance policy start date and go without GAP insurance cover as a backup to their motor insurance policy.
Did you know for example, that financing a vehicle by way of a PCP agreement could very likely mean that you've negated a potential new-for-old cover provided by your motor insurer?
Hence, we now take the view that the potential saving in the cost of a shorter term policy scheduled to start in up to a year's time, no longer really stacks up against the potential financial exposure that comes from not having GAP insurance in that first year as a backup. Thus, we no longer permit the start date of our GAP insurance policies to be deferred in this manner.
This may well come as a disappointment to some of you but, rest assured that this decision has not been taken lightly and it's only been made with the peace of mind of our policyholders as the utmost priority.
What happens to my GAP insurance policy if my Motor Insurance provider replaces my vehicle new-for-old during the first year?
We transfer your GAP insurance policy to your new vehicle. FREE OF CHARGE.