How much does motor GAP insurance cost? 

In the event that your car is totally written-off, motor GAP insurance covers any discrepancy between the amount your insurer is prepared to pay (typically the current market value) and the amount you bought it for.

When you consider how quickly cars depreciate, that extra cash can be helpful if you’re forced to buy a new one.

But how much will motor GAP (Guaranteed Asset Protection) insurance cost you? And is the peace of mind it will grant you worth it for something that you hope you’ll never need? If you’re a frequent or long-distance driver, or if having to buy a new vehicle would seriously put a strain on your finances, the answer could well be yes.

In this article, we explain the cost of motor GAP insurance, the factors that influence the cost of your policy, and the measures you can take to bring the cost of your policy down.

Jump straight to a specific section or read on for the full piece:

• What is motor GAP insurance?
• What types of GAP insurance are there?
• What influences the price of motor GAP insurance?
• How much can I expect to pay?
• Is motor GAP insurance worth it?
• How can I get cheaper motor GAP insurance?
• Where can I buy motor GAP insurance?

What is motor GAP insurance?

Your standard motor insurance policy can only cover so much. If you completely write off your car, most policies will only cover up to its current market value, not what you paid for it originally.

As cars tend to depreciate very quickly, whether you bought the car last year or several years ago, you’re likely to be out of pocket in the event that it’s declared a total loss.

That’s where motor GAP insurance comes in. It bridges the difference between what your car is worth and the amount your motor insurance provider will pay out. For example, if your vehicle is valued at £3,000 when it’s written off, but you bought it for £5,000, GAP insurance could plug the £2,000 difference. GAP insurance can also be used to cover the cost of your outstanding finance settlement (depending on your policy terms).

What types of motor GAP insurance are there?

For most drivers, standard motor GAP insurance policy is the only type of cover you need to be concerned about. However, if you use your car for work, you might need specialist cover.

Standard motor GAP insurance typically covers private vehicles not used for work or competitive events. This type of policy will apply to most drivers.

However, if you are a taxi driver, driving instructor or delivery driver, you’ll need to know about hire and reward motor GAP insurance.

Hire and reward cover offers most of the same features as a standard policy, except it also covers those who use their vehicles for this type of work.

What influences the price of GAP insurance?

The main factors that affect the cost of your GAP insurance are:

• The value of your vehicle – because more expensive cars have more value to lose, you’ll pay a higher GAP premium for a higher value car. For this reason, new cars tend to be more expensive to insure than second hand cars.
• The provider – as with any product, the cost of insurance varies between providers so keep comparing quotes to find a competitively priced policy. However, you should also compare consumer reviews of any provider you consider buying from.
• The length of your policy and/or finance agreement – the longer you take out a GAP policy for, the more it will cost (but sometimes there are deals to be had for paying a 24 month policy, rather than two 12 month policies).
• The type of GAP insurance – there are several types of GAP insurance, including return to invoice (RTI) cover, agreed value cover (AVC), and contract hire GAP (CHG), some of which are costlier than others.

How much does motor GAP insurance cost?

The single biggest influence on the cost of your motor GAP insurance policy is whether you buy it from a dealership or from an insurance provider.

Buying directly from a dealership is usually the more expensive option, and policies can start from £300 for a year’s worth of cover (according to Total Loss Gap in December 2023). That’s why it’s worth shopping around and considering buying GAP insurance from an independent provider. At Save More Money, our policy could help buy peace of mind for little more than £10 a month.

Is motor GAP insurance worth it?

According to Auto Express in January 2023, a new car could lose up to 35% of its value in the first year. That means that, if you do experience a fire, theft, or a serious accident that writes off your car after a year of ownership, you’ll only recover a percentage of its value via your standard motor insurance policy. In that sense, GAP insurance is definitely worth it.

It is, however, worth remembering that only 1% of the UK’s cars get written off every year, which means that there’s quite a small chance you’ll need to use your GAP insurance policy. That said, in the unlikely event that your car is totaled, you could be saving thousands of pounds for an annual cost of just over £120.

Additionally, GAP insurance is of much greater benefit to certain people. For example, if you drive frequently or drive long distances – which increases your chances of seriously damaging your car – or if you need your car to get to work or it’s an essential part of your job, GAP insurance is more likely to be worth it.

How can I get cheaper motor GAP insurance?

There are several things you can do to get cheaper motor GAP insurance, including:

• Buy your policy from an independent insurer – according to research from What Car? in July 2022, GAP insurance is on average 61% cheaper if you buy it from an independent insurer compared to buying it from a dealership
• Shop around – do your research online and compare different insurers providers to find a policy that suits both your needs and your budget
• Choose a higher excess – often, your policy will be cheaper if you choose a higher excess. Just make sure you can afford to pay the excess in the event of making a claim

Where can I buy cheap motor GAP insurance?

If you’re interested in motor GAP insurance and are looking for a policy that not only offers a variety of cover types but could even save you money in the long run, Save More Money might just have the right option for you from just over £10 a month.

It takes just minutes to get covered online, and we offer multiple insurance types – including finance and contract hire policies – so you can find cover that works for you.