You may have noticed, when buying a car from dealer they offer you loads of add on products. On this page I am going to explain to you, what these products are, if they are worth it and how not to get tricked.

The reason why dealers sell these products, is every time they sell one, the salesman and dealership will get a commission. So, it’s in their interest, to sell you theses products.

Gap Insurance

 

Could it be an insurance policy, to insure your iconic GAP hoodie from the 90’s?

Could it be an insurance policy, that covers you if you don’t mind the gap, getting on to the Tube in London?

Both valid guesses, as you can insure almost anything these days, even body parts, please visit my other website http://www.insuremytoe.co.uk I’m just kidding.

To understand what gap insurance is, we first must understand what our car insurance means, by saying, “if stolen or written off we will only pay market value”.

So, let’s say you buy a new car for £20,000 and you insure the car for the same value. Six months later, the car gets written off in an accident. The market value of that car is now £15,000 (as new cars lose lots of value), the insurance company is going to pay you out £15,000, not the £20,000 the car is insured for.

Now, this is where gap insurance is handy, gap insurance bridges the gap from market value, to what you paid for it. So, In the scenario above, you don’t lose £5,000.

Gap insurance can run up to three years of cover, so let’s use the same scenario as above, but instead of the car being written off at six months, let’s say two years. The cars “market value is now £10,000”, your car insurance pays you out £10,000 and gap bridges the £10,000 difference, to pay you out £20,000 in total, exactly what you paid for it two years ago.

Gap insurance is good value for money, a three-year policy, depending on the value of your vehicle, would cost from £100 – £400 for the three years of cover.

Like all insurance, gap is a “what if product”, you may never need it, but personally speaking if I was to buy a new car, I would buy it.

Gap insurance can also be purchased for used vehicles, but seeming as used cars don’t devalue as fast as new cars, it’s up to you if you see the value in the cover.

Let’s say you buy a used car that was £4,000 and in three years’ time it will be worth £2,000, the bridging gap will be £2,000. Do you see the value in gap for £2,000 worth of cover? If yes then buy it, but if no don’t, this all depends on, if this is value to you.

Worst deprecating cars in the UK 2018

These cars would even make a dent in Bill Gate’s wallet.

1 Renault ZOE I -Dynamique Quick Charge (it’s hideous) Costs new £29,020. Depreciation year 1. £21,770 (75%) year 2. £22,854 (78.7%) year 3. £23,920 (82.4%). So, in the first year it loses almost £22,000 of its value, after year 3 it loses 82.4% of its value! Instead of buying gap insurance, just don’t buy one in the first place.

2 No surprise this manufacture is on the list, Alfa Romeo Mito 1.3 JTM costs new £15,980, Depreciation year 1, £10,655 (66.7%) year 2 £11,605 (72.6%) year 3 £12,480 (78.1%)

3 Why someone would drive one of these out of choice is a mystery, Fiat Doblo 1.6 multijet 120 active. Costs new £24,487 Depreciation year 1 £15,737 (64.3%) year 2 £17,637 (72.0%) year 3 £18,937 (77.3%)

Please not this deprecation is based on 12,000 miles a year.

So, with how bad depreciation car be, you can see the value in Gap insurance, you can also see why they have hundreds of fake claims each year, of people writing their cars off on purpose. Probably all ZOE owners.

 

Cosmetic insurance

Is this to insure your make up bag inside of your car? No, it’s not.

This policy is to cover scratch and dent damaged on your car.

This policy can be incredibly useful and depending who the provider is, it can be the opposite.

This policy usually costs around £200 – £300, for three years of cover. It seems like good value doesn’t it?

On average a panel that requires paint can cost from £50 – £300, depending where and how bad the damage is. (For a guide on cosmetic repairs, please visit body repairs explained)

So, with one damaged panel, it could exceed the price of the insurance, it seems like a bargain.

For you to determine if this cover is worth it, you need to read the small print of the insurance.

For example, let’s say it covers you for Dents and scratches up to 15cm in length or diameter, if the damage is even 1mm over, the insurance won’t pay out.

A 15cm scratch is pretty big, so this is a fair level of cover. So, it is important to check how big, the damage allowance is.

There are other terms and conditions you need to check.

What is the damage allowance? Check how big the allowance is. 15cm if fair, but lets say it’s 5cm, the cover isn’t worth it, due to most scratches are usually longer.

What panels are covered? Some panels like the bonnet may be excluded so it’s important to check what panels are covered.

Are joining panels covered? Let’s say you have a scratch that’s under the length limit,, but it’s across two panels, it may not be covered. So always check if joining panels are covered, as a scratch won’t always be on one panel.

Is there a claim limit value? is there a maximum value the damage can cost, for them to pay out? Let’s say the damage will cost £250 and the claim limit is £200, the insurance is not going to pay out.

Is there an amount of claims limit? So, let’s say the policy runs for three years, how many times can you claim in those three years? If you can only claim once, to be honest the cover is not worth it.

Is there an excess? An excess, is when you have to make a contribution, for the insurance to pay out. Always check if there is one and how much it is.

Tyre Insurance

Tyre insurance is cover for accidental or malicious damage, to your tyres. This is pretty strait forward, but again check the terms and conditions.

What damage is covered? Again, check the terms and conditions to see if, pothole damage or someone slashing your tyres are covered.

Is there a claim limit value? is there a maximum value the damage can cost for them to pay out? Let’s say the damage will cost £250 and the claim limit is £200, the insurance is not going to pay out.

Is there an amount of claims limit? So, let’s say the policy runs for three years, how many times can you claim in those three years? If you can only claim once, to be honest the cover is not worth it.

Is there an excess? An excess, is when you have to make a contribution, for the insurance to pay out. Always check if there is one and how much it is.

Is it like for like? Let’s say, you have a containment tyre and it needs replacing, are they going to give you another continental tyre, or a cheap budget brand instead.

Alloy Wheel insurance

Alloy wheel insurance, covers you for cosmetic damage and structural damage (the wheel needs replacing)

Again, as the previous two check the terms and conditions.

What damage is covered? Again, check the terms and conditions to see what type of damaged is covered.

Is there a claim limit value? is there a maximum value the damage can cost for them to pay out? Let’s say the damage will cost £250 and the claim limit is £200, the insurance is not going to pay out.

Is there an amount of claims limit? So, let’s say the policy runs for three years, how many times can you claim in those three years? If you can only claim once, to be honest the cover is not worth it.

Is there an excess? An excess, is when you have to make a contribution, for the insurance to pay out. Always check if there is one and how much it is.

Paint protection

This is the only one on the list that is not an” insurance product”. Paint protection is a ceramic like finish, that is applied over the paint, to protect it from stone chips and scratches.

It has other benefits, like making rain bead and protection against grime, but it’s biggest selling point is chip and scratch protection.

Now, most stone chips are caused by driving on the motorway, the speed limit is 70 MPH, so most chips are a result, of a stone being launched at 70 MPH at your car, a thin layer of lacquer is not going to prevent much.

So, to be very honest, myself and many other dealers, deem this as useless as an ashtray on a motorbike.

Most dealers who sell this, know that it’s pretty much useless. This can cost around £200 – £300 and your far better off, buying cosmetic insurance instead. (if stone chips are covered)