Is GAP Insurance Worth It? | Dynamo Cover
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Is GAP Insurance Worth It?

is gap insurance worth considering

To figure out if GAP insurance is worth it, we must first understand what GAP insurance stands for and what it does. First things first, what does GAP insurance stand for?

It stands for Guaranteed Asset Protection, which means that this type of insurance will help you to make up the difference between what your car is worth at the time of purchase and the amount you owe on it at the time of an accident or theft.

GAP insurance can be extremely useful if you get into an accident or have your car stolen before your car loan or finance has been fully paid off. Although GAP insurance is not a legal requirement, you should consider taking it out if you are worried about the difference between market (resale) value and what you’ve paid for the vehicle.

RTI GAP dynamo cover

Should I Buy GAP Insurance For both New & Used Cars? 

You should consider getting GAP insurance for both new and used car purchases. Although most of the depreciation usually happens within the first year of driving off the forecourt (around 40%), your car will continue depreciating after that. Factors that will affect the rate of depreciation are model, age and mileage. Although this will impact a used car, it will not be at the same rate as a brand new vehicle.

How Do I Calculate The Cost of Insurance? 

GAP insurance is typically calculated on the cost of your vehicle, so the higher the purchase price, the higher your premium will be. Most insurance companies will provide additional benefits, like your excess payment or personal protection cover. You also need to consider how long you would like your cover to last.

To ensure that you don’t overpay for GAP insurance, you should compare quotes before buying coverage. Also, don’t forget about deductibles—these variables can dramatically impact your out-of-pocket expenses and could change how much you pay in a worst-case scenario. Take a look at this post to see some example calculations of how to work out the cost.

What Price Should I Use As The Vehicle Price?

The type of GAP insurance you choose can affect this. You should use an amount that is as close to the net invoice price as you originally paid for the vehicle.

This figure should be shown on your vehicle’s invoice and should include any factory extras, cash deposits, or part exchange allowance. If a discount has been applied to the list price, or if any interest has been added to the loan, the figure should not be the list price of the vehicle.

You may not have a purchase invoice for the vehicle under Contract Hire agreements. If so, the P11D value would be the perfect value to use, if not the list price for the vehicle from the manufacturer (these prices ought to be very similar, if not identical).

You can search for the agreed value directly on

What Happens If The Vehicle Is Sold Before The Cover Ends?

Some GAP products will allow you to cancel the policy, and apply for a ‘pro-rata’ refund for the time left on the policy. This is a common practice for online retailers and dealerships.

You may find that one of the biggest differences between taking GAP out with a motor dealer and buying it from an independent retailer, is that you won’t have the option to transfer your policy to another vehicle mid-term. This makes buying GAP insurance from Dynamo Cover a more convenient option.

Where Can I Buy GAP Insurance? 

You can buy GAP insurance from car dealerships, insurance providers and specialist providers. However, at Dynamo Cover, we offer 2 types of GAP Insurance – Return to Invoice and Outstanding Finance. To find out more, you can read our guide on the different types of GAP insurance. 

Can I Get GAP Cover For All Makes & Models? 

Most insurers will provide cover for most makes and models. However, you should be able to see the list of exclusions on their websites. Some companies will only cover vehicles up to a certain value, whereas others will be able to provide GAP insurance for specialist cars.

Under What Circumstances Does GAP Insurance Not Pay Out?

One of the main questions we get regarding GAP insurance is when would it not pay out. Therefore, to answer the question, below are some examples of when GAP Insurance may not pay:

  • If your main motor insurer does not pay out. There may have been negligence, alcohol consumption or general violations of the law on the part of the driver.
  • If the vehicle did not belong to you. To be eligible for a GAP Insurance policy, you must have an “insurable risk” on your vehicle. That means you will suffer financial losses if the vehicle is written off. This can happen if you own the vehicle outright, have a finance agreement on it or have a lease agreement. If none of these applies, you have no claim (for example, your name is not on the sales invoice for the vehicle).


Hopefully the above guide has answered all your questions and given you the points to decide if GAP insurance is worth it. At Dynamo Cover, we are proud to offer a range of comprehensive motor policies including; GAP Insurance, car breakdown and used car extended warranties.

We’re number 1 on all comparison sites, with our competitive pricing. We pride ourselves on our outstanding products and user service.

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