A friend is about to purchase a three year old hatchback from a local main car dealer. The price is in the region of £11k to £12k, with approx 24,000 miles on the clock. The car's bodywork is in good condition and has a full service history, having been serviced from new by the main dealer.
The question is, would you advise her taking out GAP insurance at a cost of £350 for two years cover?
Gap insurance is just another rip-off from the insurance industry, which is a win-win for them. They value your car at less than you paid for it, and offer you the option to pay an additional fee to cover them paying you the market rate for the vehicle.
You have to ask yourself, why are all these car buyers paying over the odds for their vehicle or is the insurance industry just ripping off punters?
Dealer second-hand car prices have gone mad due to the problems with the supply of brand new vehicles – my boss recently purchased a Mazda (more than 2 years old) for £27k.
I forgot to post my reply. Gap insurance is never worthwhile if you buy a used car, it doesn’t suffer the huge, rapid depreciation that a new car is subject to as soon as you drive it off the forecourt.
Tell your friend to save his money