GAP Insurance
Guaranteed Asset Protection insurance covers the “gap” between what your insurer pays if your car is written off or stolen and what you still owe on finance (or what you paid for the car). New cars can lose 15–20% of their value in year one, so the gap can be thousands. It’s most worthwhile on PCP and HP deals for new cars; on older cars owned outright it rarely makes sense.
Example
Write off a £25,000 car owing £22,000 when the insurer values it at £19,000 — GAP pays the £3,000 difference.