Lease car GAP insurance

I’m not sure that you’d need GAP insurance with a lease? I used to have a Nissan on lease, from what I can recall it would have served no purpose. (Edit - insurance was included in monthly cost)

I do have GAP insurance currently, but it’s for a Mini Coupe JCW, I’ve had long conversations with insurance companies about this and I want to get back what I paid if the car is stolen or written off, it’s pretty heavily modified.

joeydeacon13/11/2019 11:57

I’m not sure that you’d need GAP insurance with a lease? I used to have a N …I’m not sure that you’d need GAP insurance with a lease? I used to have a Nissan on lease, from what I can recall it would have served no purpose. (Edit - insurance was included in monthly cost)I do have GAP insurance currently, but it’s for a Mini Coupe JCW, I’ve had long conversations with insurance companies about this and I want to get back what I paid if the car is stolen or written off, it’s pretty heavily modified.Read lessRead more

Lease co will expect its asset / contractual financial settlement to be satisfied. Gap insurance may be an astute option.

AndyRoyd13/11/2019 12:03

Lease co will expect its asset / contractual financial settlement to be …Lease co will expect its asset / contractual financial settlement to be satisfied. Gap insurance may be an astute option.Read lessRead more

Fair dos.

I have gap with my current lease, the way it works if you don't have gap just insurance, they insurance will pay the car off but you will still be liable for the monthly payment, if you took gap that would pay the monthly payments and your insurance will pay the car:)

Rather than the payments you make (33x£200), won't you be liable for the value of the whole asset on an insurance claim upon write-off/theft and non recovery?

Total loss of asset effectively terminates the lease agreement (no further monthly commitment once settled, but still obligated to continue with monthly payments until settlement received by lease co; this obligation should be mentioned in lease agreement.). The finance settlement figure will be presented by the lease co which if you're lucky will be the value allocated by the vehicle ins co, but it is highly unlikely that value would be sufficient for full settlement, hence sensible to consider gap ins.

Avenger13/11/2019 12:11

...if you took gap that would pay the monthly payments and your insurance …...if you took gap that would pay the monthly payments and your insurance will pay the car:)Read lessRead more

Total loss terminates agreement. Lease co is paid a settlement, which by definition involves no further monthly payments.

AndyRoyd13/11/2019 12:12

Total loss of asset effectively terminates the lease agreement (no further …Total loss of asset effectively terminates the lease agreement (no further monthly commitment once settled, but still obligated to continue with monthly payments until settlement received by lease co; this obligation should be mentioned in lease agreement.). The finance settlement figure will be presented by the lease co which if you're lucky will be the value allocated by the vehicle ins co, but it is highly unlikely that value would be sufficient for full settlement, hence sensible to consider gap ins.Read lessRead more

"Total loss of asset effectively terminates the lease agreement"

Without knowing the terms of the contract, you can't make this statement.

Why would a total loss payout from your insurer satisfy your obligations under a totally seperate contract with your lease company? My insurer doesn't have a clue what the terms of my lease agreement are.

Stop flooding these threads with inaccurate advice.

adam_holcombe13/11/2019 13:07

"Total loss of asset effectively terminates the lease agreement"Without …"Total loss of asset effectively terminates the lease agreement"Without knowing the terms of the contract, you can't make this statement. Why would a total loss payout from your insurer satisfy your obligations under a totally seperate contract with your lease company? My insurer doesn't have a clue what the terms of my lease agreement are.Stop flooding these threads with inaccurate advice.Read lessRead more

If you can find a lease agreement that does not terminate on settlement of total loss I would be interested to view it

My contract does say "This agreement will terminate immediately following a total loss of the vehicle (see clause 9.4) subject to those provisions of this agreement which are capable of surviving termination"

9.4 states. On termination of this agreement under clause above you will immediately pay to us together with VAT:

- all arrears of hire charges, services charges and other sums due under this agreement together with interest

- any excess mileage charge

- by way of liquidated damages and/or compensation for our loss an amount equal to all hire charges which had this agreement not been terminated were agreed to be paid by you to us until the end of the fixed period less a discount for accelerated payment at the rate of 50%

- and a sum equal to the anticipated residual value for the vehicle.


So reading into this, I guess I would be liable for 33 x £100, plus a sum equal to the residual value (of which this part should be the insurance??) is that correct?

AndyRoyd13/11/2019 13:38

If you can find a lease agreement that does not terminate on settlement of …If you can find a lease agreement that does not terminate on settlement of total loss I would be interested to view itRead lessRead more

In short, settlement of a lease isn't just about the value of the vehicle that's been deemed a total loss.

As examples, any outstanding maintenance payments may still be due. Mileage over the agreed amount may me payable.


Here you go, lifted from my own lease agreement with VWFS.


If the Vehicle is lost, damaged or destroyed so as to become an actual ,
arranged or constructive total loss you must pay us, when we ask, such
sum as will equal the amount calculated in accordance with Term 8.2.

8.2

If we terminate the hiring, or accept your repudiation of this Agreement, you must pay us:
• all arrears of rentals, maintenance charges and other payments due (which
shall include excess mileage and interest, where applicable) ; plus
• as compensation or agreed damages on our acceptance of your
repudiation, or as a debt on our termination, the total amount of rentals
payable during the Hiring Period (excluding VAT) less the amount of
rentals paid or which have become due (excluding VAT) less also an
amount (if any) equal to a rebate of rentals calculated at the rate of 4%
per annum on the rentals (excluding VAT) which have not become due;
plus
• all our expenses of recovering or trying to recover the Vehicle, repairing or
storing it and tracing you (plus VAT); plus
• an administration charge of up to £100 (including VAT) where this is
reasonably required to meet our processing costs.

awjh13/11/2019 13:46

My contract does say "This agreement will terminate immediately following …My contract does say "This agreement will terminate immediately following a total loss of the vehicle (see clause 9.4) subject to those provisions of this agreement which are capable of surviving termination" 9.4 states. On termination of this agreement under clause above you will immediately pay to us together with VAT:- all arrears of hire charges, services charges and other sums due under this agreement together with interest- any excess mileage charge- by way of liquidated damages and/or compensation for our loss an amount equal to all hire charges which had this agreement not been terminated were agreed to be paid by you to us until the end of the fixed period less a discount for accelerated payment at the rate of 50%- and a sum equal to the anticipated residual value for the vehicle.So reading into this, I guess I would be liable for 33 x £100, plus a sum equal to the residual value (of which this part should be the insurance??) is that correct?Read lessRead more

Seems to suggest the following:

(50% of your monthly payment amount x number of months remaining) + the expected value of the car as at the end of your agreement + any excess mileage charges.

awjh13/11/2019 13:46

My contract does say "This agreement will terminate immediately following …My contract does say "This agreement will terminate immediately following a total loss of the vehicle (see clause 9.4) subject to those provisions of this agreement which are capable of surviving termination" 9.4 states. On termination of this agreement under clause above you will immediately pay to us together with VAT:- all arrears of hire charges, services charges and other sums due under this agreement together with interest- any excess mileage charge- by way of liquidated damages and/or compensation for our loss an amount equal to all hire charges which had this agreement not been terminated were agreed to be paid by you to us until the end of the fixed period less a discount for accelerated payment at the rate of 50%- and a sum equal to the anticipated residual value for the vehicle.So reading into this, I guess I would be liable for 33 x £100, plus a sum equal to the residual value (of which this part should be the insurance??) is that correct?Read lessRead more

No, in that example 33 x £100 would not be due. Look at the second line of your quotation; it mentions "all arrears of hire charges" where the key requirement is indicated by "arrears", it does not mention "future" or "all remaining monthly payments" had the vehicle not been totalled; an element of the remaining payments is covered in the line commencing "by way of liquidated damages and/or compensation for our loss.." which is what the GAP may cover after the ins co payment.

adam_holcombe13/11/2019 13:54

Seems to suggest the following:(50% of your monthly payment amount x …Seems to suggest the following:(50% of your monthly payment amount x number of months remaining) + the expected value of the car as at the end of your agreement + any excess mileage charges.Read lessRead more

Essentially yes, which is why peeps may consider GAP insurance. Or are you still linking this to some non-termination of agreement on total loss?

AndyRoyd13/11/2019 13:58

No, in that example 33 x £100 would not be due. Look at the second line of …No, in that example 33 x £100 would not be due. Look at the second line of your quotation; it mentions "all arrears of hire charges" where the key requirement is indicated by "arrears", it does not mention "future" or "all remaining monthly payments" had the vehicle not been totalled; an element of the remaining payments is covered in the line commencing "by way of liquidated damages and/or compensation for our loss.." which is what the GAP may cover after the ins co payment.Read lessRead more

What part of that contract makes those items mutually exclusive?

Each line is in addtion to the preceeding one.

Otherwise, by your logic, if i write-off my car, I can choose to only pay "any excess mileage charge" .

You have exactly no idea what you're talking about.

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adam_holcombe13/11/2019 14:05

What part of that contract makes those items mutually exclusive?Each line …What part of that contract makes those items mutually exclusive?Each line is in addtion to the preceeding one. Otherwise, by your logic, if i write-off my car, I can choose to only pay "any excess mileage charge" . You have exactly no idea what you're talking about.Read lessRead more

The response quoted the sections of the agreement that were unique to the OPs Q which was specificly referring to monthly payment obligations. That context is still valid.
If my comments are upsetting you just mute me.

OP - Take a look at Honest John's website, the motoring guru from the Daily Telegraph, he has a specific GAP insurance section.

If you choose to take on a new lease you will not have to pay off your finance as the lease deal would change over to the replacement car.

Fees to change paperwork would need to be paid.

You can, of course, choose to lease a new vehicle with Nationwide Vehicle Contracts if your existing lease is declared a total loss, however you will be required another processing fee and initial rental for your new vehicle as this is classed as a new agreement.

In the event a leased vehicle is written off, the leasing company will issue a settlement figure. This is usually a combination of (a) the remaining rentals due on the contract; (b) an early termination admin fee; and (c) any possible disparity in the valuation of the vehicle between the leasing company and the motor insurance company. For example, the leasing company might value the car at £20,000 but the motor insurers at £19,000. The difference of £1,000 may be added in to the settlement figure you'd have to pay.

Leasing contracts differ hugely. Some demand all remaining rentals, some a proportion of them, some none at all - you'd have to study your leasing contract carefully and question them as to how they calculate the settlement figure. If once they receive the motor insurer's pay-out the leasing company don't require you to pay any more rentals, then it's debatable whether you need GAP insurance, but most (including VW Group, who want the shirt off your back as part of the settlement) will require at least a proportion of the outstanding payments. CHECK CAREFULLY.

Contract Hire GAP insurance aims to pay any shortfall between the motor insurance company's pay-out and the leasing company's settlement figure. This can run into thousands of pounds, so it's well worth considering GAP insurance.

Best deals appear to be with gapinsurance.co.uk at the moment.