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GAP insurance

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Sue Balou | 11:16 Tue 29th Mar 2011 | Insurance
5 Answers
We bought a one year old car yesterday from an approved dealer. Part of the package was GAP insurance and minor damage insurance (for small scratches and dents). They reduced the price of the car by the amount of the insurance, so we got a better deal by taking the insurance. If we hadn't taken the insurance then they wouldn't have reduced the price of the car by as much.

We've looked at the insurance paperwork and (of course) there's a 14 day cancellation period where we can get a refund of the premium if we cancel. We can get GAP insurance ouselves for a quarter of the premium charged by the dealer.

So my question is this, is there anything stopping us cancelling the GAP insurance, get a refund of the hugely inflated premium charged by the dealer and then arrange it ourselves? The invoice from the dealer shows the GAP insurance as a separate amount. I'm thinking the dealer won't be too happy as they reduced the price of the car based on the fact that we were buying the insurance.

Any opinions gratefully received.



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Read the small print / Terms and Conditions from the insurance company, same from the car dealer to make sure you can do this without penalty. You must make sure there are no come backs, then I would think you can do it. I would !
Question Author
Thanks Smurfchops.
I read through all the documents. There's nothing on the invoice for the car. Insurance is on a separate invoice. In the GAP insurance paperwork is a "Statement of Price" and in the box headed "Premium for this Insurance" it says "The insurance is optional and not a requirement of your vehicle purchase". Also, other documents say that the dealer doesn't get a fee for selling the insurance.

I think we'll be quids in!
Will any refund be paid to you or direct to the dealer?
Question Author
Good point, twix123, I called the insurance administrator and asked what happens if we cancel. They only checked if we had paid the premium as a whole (which we did) or in instalments. We have to cancel in writing and they will send the refund direct to us.

I keep thinking there must be a catch, but seems not.
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