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Van GAP insurance explained

Van GAP insurance explained

You rely on your van to get you and your cargo from A to B, so it makes sense to know your options when it comes to looking after it.

GAP Insurance is one such option for your van. It's designed to cover the shortfall between an insurance pay-out amount and what your van was worth when you bought it. GAP stands for Guaranteed Asset Protection - it exists to protect the value of your van as an asset should something unexpected happen to it, like theft or a write off.

Here, we explain all you need to know about van GAP Insurance so that you can make an informed decision as to whether it's right for you.

What is van GAP insurance?    

It's never a nice thing to think about, but imagine for a moment that your van has been stolen. Unfortunately, it doesn't look like it will be recovered and returned to you, so you make a claim to your insurance company.

Your insurers assess your claim and provide a pay-out quote based on the current market value of your van - £7,000. The problem is that you have a finance agreement against your van for £10,000, which is what it was worth when you first bought it. All vehicles depreciate over time, and your insurer will only ever offer a sum based on a van's market value at the time of a claim.

The finance agreement still needs to be settled and now there's a shortfall between what you still owe to the finance company and what your insurers are offering you as a pay-out. Could you afford the £3,000 to cover the difference? And how would you afford a new van to replace your stolen one?

Van GAP insurance is a safety net for situations like this. Should you need it, van GAP insurance would cover the difference between what your insurers offer if your van is stolen or written off, and what it was worth when you bought it. You can settle your existing van finance agreement and start fresh with a new one on a new van.

What is RAC Combined Guaranteed Asset Protection (GAP) & Return To Invoice (RTI) Insurance?

If your vehicle is written off or stolen and declared a total loss by your motor insurer, our Combined GAP & RTI insurance will cover the difference between the vehicle's market value and the net invoice price you paid for it or any outstanding finance (whichever is greater). 

Even better, you don't even have to have a finance agreement from Vanbase to apply. We can provide RAC Combined GAP Insurance on any van that fits the criteria for suitability, regardless of where you took out your van finance. Protect your van with RAC Combined GAP Insurance today!

Do I need GAP insurance for my van?

Van GAP insurance is a great safeguard for almost anyone who drives and relies on a van, although there are a few exclusions to this type of cover, such as vans over 3,500kg gross vehicle mass.

That said, van GAP insurance may be especially beneficial to you if any of the following applies.

For example, if you paid only a small deposit on your van when you took out your finance agreement, you'll have more to pay back and therefore a potentially larger shortfall if something unexpected were to occur.

Similarly, if you've opted for a longer loan term, you'll likely have significantly more to pay back on your agreement. There's also the increased chances of something happening to your van over an extended timeframe.

The type of van finance you take out can have a bearing on the need for van GAP insurance too. Unlike HP finance, PCP finance agreements include a larger 'balloon' payment at the end of the term, which you would pay if you wanted to own the van outright. With any finance agreement, the full amount must be settled in the event of van theft or write off, but it's worth noting that any remaining loan amount may be larger with PCP finance due to the balloon payment.

Finally, and perhaps most importantly, ask yourself if you could afford to replace your van if something happened to it. If not, or you're unsure, van GAP insurance could provide the peace of mind that you'll be covered if the worst occurs.

Ask us about RAC Combined GAP and RTI insurance for your van today

If you'd like to know more about van GAP insurance and whether it could be a good fit for you, we're here to help. Get in touch with us to learn more. 

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