Whether it’s your dream vehicle or simply a reliable upgrade to get you from A to B, buying a new car is a big moment. But many drivers don’t realise just how quickly a car – particularly a new car – can lose value, and how depreciation could leave you seriously out of pocket if the unexpected happens.
There are 2 products we’re going to talk about. Finance GAP for when you put a small deposit down, then use car finance and Return to Invoice for cash purchases or high deposits and part exchanges.
GAP insurance: bridging the value drop
Finance GAP (guaranteed asset protection) is a type of insurance that bridges the financial gap between what your car insurer pays out if your vehicle is written off or stolen, and what you still owe on finance.
Let’s say you buy a car for £30,000 on PCP (Personal Contract Purchase) and two and a half years later, it’s written off in an accident. Your insurer might only pay out £12,750 based on its current market value but the settle figure including the final payment could be £15,000. GAP insurance steps in to cover that difference, so you’re not left footing the weighty extra bill and trying to find a deposit for another car.
It’s not just about accidents either. Cars can be stolen, damaged beyond repair, or written off due to flood or fire. And if you’re financing or leasing your vehicle, you could still owe thousands, even if your car is no longer drivable.
Return to invoice cover: a safety net for new car buyers
Return to invoice (RTI) cover is a type of GAP insurance that does what it says on the tin, it helps you to financially return to the original invoice price of your car. That means, if your car was written off or stolen, you’re not just getting the depreciated market value from your insurer but getting topped up to what you originally paid.1
RTI cover is especially useful for new or high-value vehicles, which tend to lose value extremely quickly. In fact, new cars can lose up to 60% of their value in the first three years.2 That’s a steep drop, and if your car is written off during that time, the financial hit can be just as steep.
Think of RTI cover as a financial safety net for your high-value car investment. It gives you the confidence that, should the worst happen, you’ll be able to replace your car with a similar vehicle without having to dip into your savings or taking on extra debt.
[SUBHEADER] Why GAP insurance has been making headlines
You might have noticed talk in the news about GAP insurance. That’s because the Financial Conduct Authority (FCA) launched a review into GAP insurance after identifying concerns around value for money, highlighting that, in some cases, just 10% of the premiums paid by customers were actually returned in claims.3
As a result, many car dealerships paused or scaled back their GAP offerings, which left a subsequent ‘gap’ in the market, something which was felt by drivers.
At the same time, car values – especially for high-value and electric cars – are falling faster than expected. Combine that with the fact that more people are using finance or leasing options to buy cars, and you’ve got a perfect storm; if your car is written off, you could owe more than the car is worth, which is definitely not a position you want to be in.
All of this means one thing: drivers are more exposed to financial risk than ever before. And that’s exactly why GAP insurance, particularly return to invoice cover, is becoming a must-have rather than a nice-to-have.
More drivers are looking for protection
These changes in the landscape mean that more people are actively looking for ways to protect their car investment. It’s not just about protecting your car, it’s about protecting your finances, your plans, and your peace of mind.
At Caleb Roberts, we offer GAP insurance that’s clear, fairly priced, and designed to meet the latest FCA standards. Whether you’re buying a car outright or through finance, we’re here to help you stay protected. We believe in keeping things simple, transparent, and jargon-free, because insurance should make life easier, not more complicated.
We also understand that every driver’s situation is different. That’s why we take the time to understand your needs and recommend the right level of cover for you. No pressure, just honest advice and reliable protection.
Make sure you’re not left out of pocket
We’d be happy to help you find the right cover. Simply give us a call on 01547 528028.
