What is Electric Vehicle GAP Insurance?
When a vehicle is declared a total loss (due to theft, accident, fire, etc.), your primary car insurance provider will typically only pay out the vehicle’s current market value at the time of the incident. Due to depreciation, this amount is often significantly less than what you originally paid for the car or what you may still owe on a finance or lease agreement. GAP insurance bridges this financial gap by covering the difference.
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The Electric Vehicle in market in the UK is currently booming and with no signs of it slowing down, Electric Vehicles are set to become the car of choice for more and more road users. Electric car sales have been growing strongly and there are now over 520,000 battery-electric cars on UK roads, plus a further 405,000 plug-in hybrids, and these numbers are growing every year.
As well as being far better for the environment, Electric Vehicles have many benefits for the consumer too. With lower running costs, reduced or zero tax and a better overall driving experience, it’s no wonder that 14,433 BEVs were sold in January 2022, making up 12.5% of all new registrations that month.
With our Return to Invoice Advance single payment product, we cover Electric Vehicles as standard. So if you’re part of the growing number of people considering an electric car, gapinsure.com is able to ensure you’re not left out of pocket if your Electric Vehicle is ever written off or stolen.
If the unexpected happens and your electric vehicle is stolen or written off, our GAP insurance ensures you’re not left out of pocket, by covering the difference between the amount your insurer pays out and the price you paid for your car, or owe on your car if you have finance.
Remember, your insurer will only pay for the value of your car at the time of your accident or when it was stolen, not its original value. If you’re paying for your car on finance, this money should be used to pay off the remaining balance. It’s not a legal requirement to use the GAP payout to pay the finance, but you’ll still need to pay the finance back at the end of your lease. But if the amount remaining on the finance is more than the payout, you’ll be left with a shortfall, leaving you struggling to pay for the electric car.
That’s why our Guaranteed Asset Protection (GAP) insurance closes the gap for you – by covering the difference between the amount your insurer pays out and the price you paid for your electric car.
If you’re looking for Electric Car GAP insurance for your Tesla, Hyundai, BMW, Audi or countless other makes & models – get your quote today!
Why is EV GAP Insurance Important?
While all new cars depreciate, EVs can be a greater risk for a significant financial gap due to a few key factors:
- High Upfront Cost: EVs are often more expensive to purchase than their gasoline or diesel counterparts, which means the financial gap between the purchase price and the depreciated value can be larger.
- Rapid Depreciation: Some sources suggest that EVs can depreciate faster than traditional cars, especially in the first few years, due to evolving battery technology and a rapidly changing market. This rapid drop in value can make the market value payout from your insurer much lower than anticipated.
- Costly Repairs: EVs have advanced technology and expensive battery systems. Even a seemingly minor collision can result in a “total loss” if the battery is damaged, as a replacement can be prohibitively expensive. This increases the likelihood of a write-off and, therefore, a claim where GAP insurance is needed.