What is GAP insurance?

GAP (Guaranteed Asset Protection) insurance covers the difference between what your standard car insurance pays out if your car is written off or stolen, and what you originally paid or still owe on finance. Without it, you could be left with a loan to pay on a car you no longer have.

When is GAP insurance worth it?

GAP insurance is most valuable when you have a large loan relative to the car's value, when the car depreciates quickly (new cars lose 25-35% in year one), or when you have a long finance term. It is less useful for older cars or when you made a large deposit.

How much does GAP insurance cost?

Dealer-sold GAP insurance can cost £200-£400+ but standalone policies from specialist providers typically cost £100-£200 for 3 years of cover. Always shop around rather than buying from the dealer, as FCA regulations mean dealers must tell you GAP insurance is available elsewhere.

What types of GAP insurance are there?

The three main types are: Return to Invoice (RTI) which pays the difference between the write-off value and what you paid; Finance GAP which covers the difference between write-off value and outstanding finance; and Vehicle Replacement which covers the cost of replacing with an equivalent new model.

Can I buy GAP insurance after purchasing the car?

Yes, you can buy GAP insurance up to 180 days after purchasing a new car, or sometimes longer for used cars. Many specialist online providers offer competitive standalone policies. The FCA requires dealers to give you a cooling-off period to compare prices.

CarCalcs

GAP Insurance Calculator — Finance Shortfall

Calculate the gap between your car's current value and your outstanding finance to see if GAP insurance is worthwhile.

Purchase Price

Vehicle Age

Finance Amount

Finance Term

Months Paid So Far

Depreciation Rate

How We Calculate This

How The GAP Is Calculated

The gap is the difference between two values:

Current market value: Purchase price minus cumulative depreciation
Finance outstanding: Original loan minus payments made so far
The GAP: Finance outstanding minus current value (if positive)

Depreciation Model

Standard depreciation: ~25% in year 1, ~15% in year 2, ~12% in year 3, then gradually decreasing. Fast-depreciating cars (luxury, high-spec) lose more; slow depreciators (popular models, Toyota, etc.) lose less.

Frequently Asked Questions

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Last updated: February 2026

All calculations are estimates. Actual figures may vary based on driving conditions, vehicle specifications, and other factors.