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Gap insurance

Protect your car's value from depreciation with gap insurance

  • Takes less than a minute to get a quote

  • Specialist cover provided by Direct Gap

What is gap insurance?

Gap insurance policies are designed to close the ‘gap’ between what you paid for your car, and the amount your insurer would pay out if you claimed.

Insurers only pay the market value if your car is written off or stolen, meaning you could be left out of pocket. This type of policy is most commonly bought for brand-new cars because of how fast they depreciate.

Gap insurance ensures you don't end up losing money. The amount of cover you get will depend on the level you choose when taking out a policy.

Do I need gap insurance?

Gap insurance can be bought for new or second-hand cars up to 10 years old. It's a common misconception that it's only used for financed cars.

Gap insurance is an additional cost on top of your car insurance policy. It's important to understand it, so you can decide whether you really need it.

You should consider gap insurance if:

Your car is on finance as your pay-out may not be enough to clear the debt. This could leave you paying for a car you no longer have.

You want a newer car if yours is written off or stolen. Gap insurance will cover the difference between what you originally paid for the car, and the current market value.

You'd like to guarantee you get the same amount that you originally paid in the event of a total loss.
You may not need gap insurance if:

You're happy to replace your car with a similar make and model rather than a brand-new car, if it is written off or stolen.

You have a used car and can afford to replace it with the market value paid by the insurer and your own funds if needed.

You have a fully comprehensive policy with ‘new for old’ included on your policy, and your car is less than 12 months old. Your insurer should offer ‘new car replacement’ in this case, which means you don't need gap insurance.

You have third party or third party, fire and theft insurance as having gap insurance only works with fully comprehensive cover.

You use your vehicle as a race car on a track or in a rally. Gap insurance will only cover you for road driving.

What types of gap insurance are there?

There are three types of policies to choose from when you get a quote:

  • Vehicle replacement insurance (VRI) is suitable for second-hand cars. It covers the difference between the insurance pay-out and the cost of replacing your car to the same specification as when it was bought.

  • Return to invoice (RTI) is suitable for cars that were bought brand new. It pays the difference between the insurance pay-out and the original value of the car. If your car is declared a total loss, you're covered by gap insurance, including any outstanding finance.

  • Finance, lease & contract hire protects you if your vehicle's declared a total loss. It's suitable for HP, PCP, lease and contract hire vehicles. This type of gap insurance will pay the difference between the outstanding finance balance and the motor insurer's settlement.

Get a gap insurance quote with Direct Gap

How much does gap insurance cost?

The cost of gap insurance depends on: 

  • The type of policy you choose
  • The length of the policy
  • The purchase price of your car
This table gives you an average cost for each policy type based on a 3-year policy. Information is from Direct Gap.

Policy type Average cost of 3-year policy1 Average cost of vehicle1
Finance gap insurance
£149
£10k - £30k
Return to invoice
£179
£10k - £30k
Vehicle replacement
£239
£10k - £30k

1Based on Direct Gap data June 2021 - June 2022

What doesn't gap insurance cover?

To qualify for gap insurance, the age, mileage and price of the car must fall within a certain range and the car must feature in Glass’ Guide.

Most policies cannot cover:

  • Cars with a purchase price of over £75,000 (unless they have an approved tracking device).
  • Vehicles over 10 years old.
  • Vehicles that have driven more than 100,000 miles when the policy is purchased.
Gap insurance doesn't cover taxis, private hire vehicles, cars and vans used for any other type of ‘hire and reward’, or vehicles used for racing, rallying or any other competitive event.

Can I compare gap insurance?

We don't offer a comparison for gap insurance. Instead, we have a chosen provider who offers cover, which is powered by Direct Gap.

There's also a range of specialist providers who offer cover. So if you want to shop around and compare prices, you'll need to visit them separately.

Most car dealers will offer gap insurance policies when you buy a car. But independent research shows it's 50% cheaper to buy direct from an insurer, compared to a car dealership.
With Direct Gap, you get:

  • No fees for paying by credit card, with monthly payment options available over 12 instalments (subject to status).
  • A quick resolution - they aim to settle any claim within 10 days.
  • No charge for amending your policy with new registration number or address details.
  • Cover for all named drivers on your policy.
  • £250 towards your motor insurance excess.

Get a gap insurance quote with Direct Gap

Is gap insurance worth it?

New cars depreciate quickly. From the moment they leave the shop their value drops. Generally, a new car depreciates a staggering 20% per year on average.

For example, if you purchased a car for £20,000, by year three it’ll be worth about £10,000 at market value. This is based on approximately 20% annual depreciation.

If your car is declared a total loss, your insurer will only pay out the market valuation of £10,000. It’s unlikely that this’ll be enough to buy a newer equivalent model. So you’ll have to pay the £10,000 difference or settle for an older car.

Having gap insurance in place would mean you would get £20,000 in the event of a claim, £10,000 from your insurer and £10,000 from gap insurance. So you’d be able to get a new replacement without having to pay yourself*.

Gap insurance could be worth considering if you’re worried about not getting the price you paid back for your car if it was written off or stolen. Or if you’re likely to be in negative equity if something were to happen to your car.

*Return to invoice or vehicle replacement policies only.

What do I need to get a quote?

We've partnered with Direct Gap, who can provide you with a quote in less than a minute. All you'll need to get a quote is:

  • The value of your car when you bought it, excluding modifications added after purchase.
  • How many years cover you need, ranging from 1 to 5 years.
You'll then be given a quote for 3 different types of policies on offer. Choose the option that's right for you and buy to start your cover.
Confused.com's Gap insurance is provided by Direct Gap who are a trading style of Motor Gap Limited. Motor Gap limited are authorised and regulated by the Financial Conduct Authority under firm reference number 516846 and is a company registered in England with registration number 07109212, whose registered office is at Hawkstone House, Valley Road, Hebden Bridge, West Yorkshire, HX7 7BL. Confused.com is an intermediary and receive commission from Motor Gap Limited which is a percentage of the commission received by Motor Gap Limited.