Gap insurance

Protect your car's value against depreciation

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What is gap insurance?

The minute a new car drives off the garage forecourt, it can depreciate in value.

Gap insurance, also known as depreciation insurance, can protect against this.

It's designed to bridge the gap between the original amount you paid for your car, and the amount your insurer pays out based on its value at the time of a claim.

What does gap insurance cover?

If your car is written off or stolen, your insurer typically offers you the current market value of the car. In many cases, this can be quite a bit lower than what you originally paid for it.

Gap insurance covers the difference in price, allowing you to replace your car without having to find additional funds.

There are several different types of policy available, depending on how old the car is, and where and when you bought it.

With Warranty Direct for example, you can get cover for: 

  • cars with value up to £50,000warranty direct logo
  • new and used cars up to 7 years old
  • cars that have fewer than 80,000 miles on the clock
  • cars bought from dealers and private sellers are also eligible for gap insurance cover

Is gap insurance worth it?

Say you bought your car for £8,000, which depreciates at roughly 20% per year.

By year three, it’ll be worth about £4,000 at market value. That’s nearly a 50% drop overall!

If your car is stolen or written-off, then your insurer will only pay out the market valuation of £4,000. It's unlikely that this'll be enough to buy a newer equivalent model, leaving you to fork out for the £4,000 shortfall or settle for an older car.

If you’d taken out gap insurance when you’d first bought your car, you’d get £8,000 (£4,000 from your insurance policy and £4,000 from the gap cover). This would mean you’d be in a better position to get a suitable replacement without having to dip into your own pocket.

Get a gap insurance quote today

Confused.com's car depreciation insurance is provided by Warranty Direct Ltd. Warranty Direct Limited is authorised and regulated by the Financial Conduct Authority. Registered office; Warranty Direct Ltd, Pinnacle House, A1 Barnet Way, Borehamwood, Hertfordshire, WD6 2XX. Registered in England & Wales No. 3233010