Finance / Lease / Contract Hire Gap Insurance

In the event of your vehicle being written off in an accident or stolen, our Finance, Lease and Contract Hire Gap Insurance can offer priceless financial protection. It will pay the difference between the outstanding finance balance and the settlement you receive from your motor insurer.

Cover will include up to a maximum of £1,000 motor insurance excess.

Let’s say that at the point where your car is declared a total loss, you owe £20,000 on your finance agreement. However, due to depreciation and other factors, your car at that stage is only valued at £14,000, which is the settlement you receive from your motor insurance provider.

That leaves you with a hefty £6,000 shortfall on the finance agreement – an amount that you may not be able to come up with. But by taking out Finance Gap Insurance with Direct Gap you’ll have protected yourself, as your policy will ensure that we’ll cover that £6,000 deficit.

Because the value of your car at the time of being declared a total loss will be different to when you first bought it, your motor insurer will offer you a settlement in line with its current worth, rather than the value at the time of purchase.

Recent research shows that the average car depreciates by as much as 60% in its first three years which, if your car were to be written off, could leave you with a significant deficit to pay on a vehicle you can no longer drive.

That’s a situation that nobody would relish, which is why our Finance Gap Insurance is worth considering as a sensible option to mitigate any damaging costs if the worst were to happen to your car.

If misfortune were to strike and your car was declared a total loss, you could be left with a large amount outstanding on your finance agreement. That’s because a motor insurer’s settlement will be in line with the car’s value at the time of the incident, rather than its worth when you originally made the purchase.

If you come to us for your Finance Gap Insurance, we’ll cover that shortfall on your agreement. Without it, you’d have to make up that deficit out of your own pocket, leaving you to pay off a car that is no longer driveable.

Gap Insurance for lease hire is not a legal requirement in the same way that standard motor cover is. But it could prove a shrewd financial decision if your vehicle were to be declared a total loss.

If your car got stolen or was written off and you had not taken out a Gap Insurance policy, the leasing company would expect you to pay off the remainder of the lease. This could run into many thousands of pounds.

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Only your insurer can declare the vehicle a total loss which in general can result from accidental damage, your fault or third party fault, fire, theft or vandalism.

Total loss means that you have claimed under your motor insurance, your claim has been agreed, your vehicle has been forfeited (title of the vehicle transferred to the motor insurer) and a payment made following the incident.

If your vehicle is written off and you have taken out Contract Hire, HP or PCP Gap Insurance, the next steps will be as follows:

1. Your motor insurer will confirm your car is a total loss.
2. A settlement figure is requested and subsequently received from the provider of your finance agreement.
3. Direct Gap will then pay the difference between the motor insurer’s settlement and the total finance remaining on the vehicle, ensuring that you have nothing to pay.
4. If you have chosen to purchase deposit protection as an add-on to your main Finance Gap Insurance policy, your deposit will be refunded up to a maximum value of £2,000.

Yes, if your car is written off in an accident that was your fault, your Contract Hire Gap Insurance will still cover you. However, some exclusions apply. For example, if the driver is under the influence of alcohol or non-prescription drugs, the policy will not be valid. The same goes for any illegal activity, fraud or an act of wilful negligence. Please see your policy wording for a full list of the exclusions.

You need to wait until your motor insurer has declared your vehicle a total loss before you can make a claim. Once they have done that, the process is perfectly straightforward:

1. Call our claims line on 01422 756 100.
2. Fill out the claims form.
3. Your paperwork will be checked by a member of our expert in-house claims team.
4. If all is approved, your money will be sent to you via bank transfer.

For more information, head over to our guide on how the claims process works.

If you’ve bought your car via Personal Contract Purchase (PCP), choosing between our policies will depend on your circumstances – there is not necessarily one solution that will suit all.

For example, our Finance/Contract Hire Gap Insurance may be most appropriate if you have put down a minimal deposit. It will cover the difference between the outstanding finance balance and the value of the car at the point where it was declared a total loss.

Our Vehicle Replacement + Gap Insurance will pay the difference between your motor insurer’s settlement and the cost of a replacement car, matching the original specifications of the vehicle.

If you’ve put down a sizeable deposit on your car, our Return to Invoice + Gap Insurance may be the preferred choice. It will cover the difference between your insurer’s payout and the purchase price of your vehicle. Whatever your situation, here at Direct Gap we’re committed to providing the solution that best suits your requirements.

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Yes, our Finance Gap Insurance policies are extremely flexible and cover all types of agreements. Contract hire is specifically covered under this policy as it recognises you may not be the registered keeper of the vehicle, but the hirer.

It couldn’t be simpler to get a Finance Gap Insurance quote. Just enter your vehicle’s cost and the desired length of policy, and we’ll provide you with an estimate in a matter of seconds. If you then select ‘Buy Now’, we’ll make it clear what your policy covers and what it doesn’t.

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Yes, if you wish to discontinue your policy then you can cancel. Usually, to be entitled to a refund you need to do this within 14 days of the cover’s start date. However, we offer you a grace period of 30 days. Beyond that period, you’ll be charged £35 as a cancellation fee and then refunded on a pro-rata basis.

A Contract Hire, HP or PCP Gap Insurance policy can be purchased at any time.

The policy should always be in the name of the owner/hirer or registered keeper of the vehicle.

Yes, up to £1,000 in the event of a total loss claim.

Yes; you are covered when keys are stolen from your home or office which results in vehicle theft. However you must exercise due diligence and take appropriate steps to safeguard both the keys and the vehicle.

No insurer, including your motor insurer, will provide cover for wilful negligence. For example if you leave the keys in the vehicle and you go off to pay for fuel which results in the vehicle being stolen.

Please see your policy wording for a full listing. However, the main exclusions of Finance Gap Insurance are when the vehicle becomes a total loss as a result of:

• The driver being under the influence of non-prescription drugs or alcohol
• Being involved in illegal activity
• Fraud or an act of wilful negligence e.g., leaving keys in the ignition whilst the vehicle is unattended.

The purchase price is the price of your Vehicle, as confirmed in the sales invoice which includes factory fitted accessories and dealer fitted options up to £1,500, paintwork protection systems up to £250.

You should exclude all deposit allowances, discounts, rebates, concessions, cashbacks, incentives and contributions. Also exclude new vehicle registration fees, road fund licence fee, number plates, warranty costs, insurance premiums, fuel and other extras, arrears or negative equity.

The insurer of our Finance Gap Insurance policies is Acasta European Insurance Company Limited, (registered no. 96218), which is authorised and regulated by the Gibraltar Financial Services Commission. The insurer is subject to regulation by the Financial Conduct Authority and Prudential Regulation Authority for the conduct of UK business.

The insurer is also covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the scheme if the insurer cannot complete their obligations. This depends on the type of business and the circumstances of the claim. For claims against insurers, 90% of the claim is covered with no upper limit.

The Claim Limit is the "top up" difference between the vehicle value at the point of total loss and the amount required to settle the outstanding finance.

On vehicles costing up to £75,000, Return to Invoice policies also have an overall claim limit of the original purchase price of your vehicle. On vehicles costing over £75,000, a £75,000 claim limit is in place.

YES, we will insure your initial deposit up to £2,000. This is an optional add on.

Yes. Your Finance Gap Insurance will include all drivers provided that they are covered on your comprehensive motor insurance policy to drive the vehicle as a named driver.

You are covered not only in England, Wales, Northern Ireland, Scotland, Isle of Man and the Channel Islands but also in member countries of the European Community and any other country for which an International Motor Insurance Certificate (Green Card) is effective on your vehicle at the point of Total Loss up to 120 days in any one trip.

You can pay for your policy either in a one-off payment with the use of a credit/debit card without any charges or we can arrange for credit payments over 12 months. Please note that the payments are collected by a third-party agency and a small administration fee applies.

We are an internet-based provider and as such we have lower overheads than motor dealers. As a result of the high volume of Gap Insurance that we sell annually, we can provide quality policies at the keenest prices.

You can be confident that our prices are lower than those quoted by dealers and many other websites. Paying less than you have been quoted elsewhere in no way means that you are buying an inferior product, it just means that they are making more profit from your purchase!

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Policy documents together with confirmation of payment are sent by email as soon as you make the payment.

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This page was last updated on 12^th July 2021.

We can provide cover on vehicles up to 10 years old.