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    GAP INSURANCE?

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GAP Insurance: the overview

In the event that your car is a total loss, GAP covers you for the shortfall between the amount you receive from your motor insurer and, depending on the policy type, either the finance outstanding, the original purchase price or the cost to buy another brand new car of the same model and specification. A total loss is typically declared where a car is stolen and unrecoverable or a total write off. Your motor insurer will pay you the market value of your car at the time of claim. This will be less than you originally paid and could be less than the payment you need to make to your finance or lease company. The value of a car can fall sharply as soon as its purchased, especially in the case of newer cars. Typically a new car will lose a third of its value in the first year and almost two thirds of its value in the first 3 years.

There are three principal types of GAP insurance sold by MotorPocket: Return to Invoice, Vehicle Replacement and Lease.

Return to Invoice is available if you have bought your car with cash or finance with the option to purchase. The policy we sell covers you for the greater of your finance settlement or the original purchase price of the vehicle.

Vehicle Replacement Insurance is only available for brand new cars, bought with cash or finance with the option to purchase, where you are the first registered owner of the vehicle. The policy covers you for the cost of buying an equivalent car brand new.

Lease GAP is available for cars on a lease or contract hire agreement. The policy covers you for the lease termination charge.

Return to Invoice GAP

Return to Invoice GAP providers cover in the event your car is categorised a total loss by your motor insurer, such as if your car is stolen and unrecoverable or in the event of a total write off.

For MotorPocket Return to Invoice policy, an eligible claim will receive an amount that in addition with the motor insurer’s settlement gives you enough to repay any outstanding finance or to equal the amount you originally paid for the car, whichever is greater.

The maximum payout is subject to a claim limit selected at the time of purchase.

Return to Invoice is available for cars under 8 years old, bought with cash or finance with the option to purchase. The policy we sell covers you for the greater of your finance settlement or the original purchase price of the vehicle.

Policies are available for 1, 2 or 3 years.

Vehicle Replacement Insurance

Vehicle Replacement Insurance pays out if your car is categorised a total loss by your motor insurer, which may occur if your car is stolen and unrecoverable or a total write off.

Vehicle Replacement Insurance is only available for brand new cars, bought using cash or finance with the option to purchase. You must be the first registered owner of the vehicle. The policy covers you for the cost of buying an equivalent car brand new.

If you have bought a pre-registered or used car, Return to Invoice GAP may be suitable.

For MotorPocket Vehicle Replacement Insurance, an eligible claim will receive an amount that combined with the motor insurer’s settlement gives you the cost price of an equivalent brand new car at that time.

The maximum payout is subject to a claim limit selected at the time of purchase.

Policies are available for 1, 2 or 3 years’ duration.

Lease GAP

Lease GAP is available for cars on a lease or contract hire agreement. The policy pays out if your car is a total write off or stolen and unrecoverable.

An eligible claim will receive an amount that in addition to the motor insurer’s payout provides enough to repay the lease termination charge.

The maximum payout under your GAP insurance is subject to a claim limit selected at the time of purchase.

New cars lose value very quickly as soon as they are on the road. It is likely that the lease termination charge will be significantly greater than the motor insurer’s settlement in the early part of the lease or contract hire agreement. Calculation of the lease termination charge should be included in your lease agreement or available from your lease provider.

Policies are available for between 1 and 5 years’ duration.