Research shows that over half of all motorists are not even aware of what GAP insurance is
(PRWEB UK) 30 August 2012
Motorists in the UK have become used to increasing financial pressures in recent times, with ever increasing oil prices and regular hikes in road tax and insurance premiums. A further kick in the teeth for motorists comes with the news that despite the increase in the cost of insurance, over three quarters of them will be inadequately covered in the event of a write off or theft.
The “insurance gap” problem can be summed up as follows:
- In the event of a write off or theft, insurance companies will only pay out the current market value of the vehicle.
- The market value of a new car can depreciate up to 50% after the first year, depending on the model.
- 77 per cent of UK motorists do not take out GAP (Guaranteed Asset protection) insurance which protects motorists against any shortfall between insurance pay outs and the outstanding finance, invoice price or the cost of a like-for-like replacement.
- This means that up to 24 million motorists in the UK do not have adequate cover should the worst happen.
In a YouGov poll of 2,055 British adults, 10 per cent said that they have had a car written off and over 6% admitted having a vehicle stolen. Despite this, 10% had purchased their current vehicle with a personal loan and 11 per cent on hire purchase, leaving thousands vulnerable to costly repayments.
A further sting in the tail comes from the fact that of those that have purchased GAP insurance, only 2% said that they had shopped around meaning that 98% of people may be missing out on cost saving policies which are available online.
Simon England, managing director of leading online GAP insurance provider ALA explained:
“Research shows that over half of all motorists are not even aware of what GAP insurance is. In addition, we have found that 25 to 34 year olds are the most at risk group as 16% of this age group choose to buy vehicles with a personal loan and a further 14% on finance which leaves them open if their vehicles are written off or stolen.
“In addition, nearly three quarters of people with GAP insurance have purchased through their car dealership when they can get a superior product a whole lot cheaper through shopping around online.”
With ALA’s GAP insurance cover starting at around £69 for a three year policy, motorists can save up to 75 per cent on quotes offered from car dealers.
ALA is an independent insurance broker, which creates bespoke GAP insurance policies underwritten by UK insurance providers. It is authorised and regulated by the FSA and its policies are covered under the Financial Services Compensation Scheme.
For more information on ALA visit http://www.ala.co.uk
Notes to editors:
- All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2055 adults. Fieldwork was undertaken between 25th to 28th February 2011. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+)
- Total number of cars on British roads - 31,035,791, Society of Motoring Manufacturers and Traders (SMMT) April 2010
- Estimated number of motorists at risk from inadequate car insurance cover arrived at by calculating 77 percent of Total UK motorists
- Average GAP insurance payout from ALA is £3,600 – figure used to estimate Britain’s potential loss through inadequate car insurance cover