Car Insurance News from Be Wiser

New Car Owners 'Should Consider' Gap Insurance

Owners of a new car should consider taking out Guaranteed Asset Protection (Gap) insurance as their vehicle will depreciate fastest when first purchased, according to an insurance expert. Gap insurance covers the difference between what the car is worth and what you owe on the car. It comes into play if the car is stolen or written off while the owner is still making payments.

A spokesperson for Auto Trader, noted that drivers of new vehicles could be better off with a Gap product as in the first year after purchase a car will typically lose up to 40 per cent of its value. He added: "There are a number of different Gap-type products so cover will vary considerably."

Insurers offer drivers the option of simply paying off any outstanding loans on the vehicle or will replace it in a like-for-like swap. It is worth looking into the different types before you purchase Gap insurance.

The AA claims that in the first three years of a cars life it will typically lose up to 60 per cent of its value based on a driver travelling 10,000 miles per year.

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