Gap Insurance: New, Used and Leased Cars

Understanding all the types of GAP Insurance

In this article, we aim to provide a thorough comprehension of the distinct types of GAP insurance and their nuanced applicability to different car statuses. Our focus also extends to the procedural intricacies surrounding GAP insurance, ensuring that individuals can navigate this critical aspect of financial planning with clarity and precision.

Against the backdrop of fluctuating market values and the inherent risks associated with owning cars, GAP insurance provides a prudent means of mitigating financial vulnerabilities. Whether you find yourself in possession of a new car, a used vehicle, or a leased car, the strategic deployment of GAP insurance becomes instrumental in safeguarding against potential economic setbacks arising from unforeseen events.

In this article we’ll discuss the specific attributes of Return to Invoice (RTI) GAP insurance, Return to Value (RTV) GAP insurance, Vehicle Replacement GAP insurance, and Vehicle Finance GAP insurance. Each variant carries distinct advantages and considerations, addressing the diverse needs and preferences of vehicle owners.

We’ll also pay particular attention to the nuances associated with used cars, new car acquisitions, and the unique considerations involved in insuring leased vehicles.

At Insurance Cloud, we acknowledge the importance of informed decision-making when purchasing insurance, and it is our commitment to demystify complexities and empower individuals with the understanding required to navigate the diverse landscape of insurance products. So let’s get going.

Requirements for GAP Insurance

The requirements for obtaining GAP insurance may vary among providers, but some common factors include:

  1. Purchase Timeframe:
    • Most GAP insurance policies, including RTI and Vehicle Replacement, require purchase within a specific timeframe after acquiring the vehicle. It’s crucial to be aware of these deadlines to ensure coverage (typically between 90-180 days).
  2. Proof of Purchase:
    • All providers will require proof of purchase from a VAT registered dealer, especially for policies like RTI GAP insurance. Ensure you have the necessary documentation to satisfy the insurer’s requirements.
  3. Vehicle Type:
    • The type of vehicle, whether new or used, may impact the availability and cost of GAP insurance. Verify with the insurer whether the coverage is applicable to your specific vehicle.
  4. Finance Type:
    • If you financed your vehicle, consider Vehicle Finance GAP insurance. Different financing options, such as Hire Purchase and PCP, may have specific coverage considerations.

Types of GAP Insurance

Return to Invoice (RTI) GAP Insurance:

Return to Invoice GAP insurance ensures that you receive the original purchase price of your vehicle if it’s declared a total loss. In case your insurer provides an amount less than what you paid for the car, RTI GAP insurance bridges the gap, offering you the difference. This type of coverage is applicable to both new and used cars, with some providers requiring an invoice from a registered dealer.


  • Compensates for the amount you paid for your new or used car (this may exclude some specific additions).
  • May clear outstanding finance on the vehicle.


  • Need to purchase within a specified timeframe.
  • Potential restrictions on where you can buy the car.

Return to Value (RTV) GAP Insurance:

Return to Value GAP insurance, or Agreed Value, is versatile and can be applied to both new and used cars. It also allows you to cover vehicles purchased privately or from an Auction House. Unlike RTI, it determines the payout based on the car’s value at the time of purchasing the GAP policy, allowing coverage to be obtained at any time.


  • Can be taken out at any time.
  • Available for both new and used cars.


  • Value is based on the vehicle’s worth rather than the purchase amount.

Vehicle Replacement GAP Insurance:

Considered the most comprehensive GAP insurance, Vehicle Replacement coverage ensures that you receive either the amount you paid for the vehicle, the cost of a like for like replacement car of the same age and specification, or the outstanding finance amount. This policy accounts for any rise in the car’s value, making it suitable for those who purchased their cars at a discount.


  • Covers the possibility of a replacement car costing more than the original purchase.
  • Useful for those who bought a car at a discounted price.


  • One of the more expensive GAP insurance types.
  • Needs to be purchased within a limited timeframe (Note: VRI could pay out less than RTI if a like for like vehicle has got a greater discount than when you purchased it.).

Vehicle Finance GAP Insurance:

Designed specifically for those who financed their vehicle, Vehicle Finance GAP insurance clears any outstanding finance payments in the event of a total loss. This includes balloon payments for those on a PCP deal. While it ensures you don’t have to worry about paying off the debt, it doesn’t leave any surplus for purchasing a new car.


  • Clears finance, including outstanding and balloon payments.
  • Can be one of the more affordable GAP policies.


Does not provide funds for a new car.

May not cover negative equity unless specified.

Leased Car Gap Insurance:

Leased Car Gap Insurance addresses the unique considerations of individuals with leased vehicles. This coverage ensures financial protection in the event of a total loss, covering the gap between the insurer’s payout and the outstanding lease amount. It provides peace of mind, allowing leased vehicle owners to fulfil their obligations without incurring undue financial strain.


  • Tailored for individuals with leased vehicles.
  • Bridges the gap between insurer’s payout and outstanding lease amount.


  • Specific to leased vehicles.
  • Coverage considerations may vary based on lease terms.

Impact of GAP Insurance on Different Car Statuses

GAP Insurance on Used Cars:

Used cars are susceptible to rapid depreciation, making GAP insurance particularly valuable. RTI and RTV GAP insurance can help bridge the gap between the insurer’s payout and the original purchase price or current value of the used car. Vehicle Replacement GAP insurance ensures that you have the necessary funds to replace your used car, even if the replacement costs more than the original purchase price.

New Car Gap Insurance:

For new cars, GAP insurance becomes crucial, especially during the initial years when depreciation is most significant. RTI GAP insurance ensures that you recover the full purchase price, protecting your investment. Vehicle Replacement GAP insurance becomes essential for those who purchased a new car at a discount, as it covers the potential increased cost of a replacement.

Gap Insurance Lease Car:

Leasing a car comes with its own set of considerations. While the vehicle is not owned, it’s important to protect yourself from potential financial gaps in the event of a total loss. Vehicle Replacement GAP insurance is particularly beneficial for leased cars, as it covers the outstanding finance owed to the leasing company.

Summary of the Types of GAP Insurance

In summary, this comprehensive exploration into the realm of GAP insurance underscores its pivotal role as a financial safeguard in the face of unforeseen car losses. The nuanced understanding of distinct GAP insurance types, their applications to varying car statuses, and the requisite procedural considerations aims to empower you to make the right decision regarding your coverage.

For those with used cars, the resilience of RTI and RTV GAP insurance in mitigating the impact of depreciation is apparent. Vehicle Replacement GAP insurance, with its comprehensive coverage, becomes particularly relevant for those who secured their vehicles at a discounted rate, assuring coverage for potential increased replacement costs.

In the context of new car ownership, the imperative nature of GAP insurance becomes evident during the initial stages when depreciation exerts its most substantial influence. RTI GAP insurance, with its commitment to compensating the full purchase price, emerges as a stalwart protector of the financial investment tied to a new vehicle. Simultaneously, Vehicle Replacement GAP insurance proves indispensable for those who negotiated a discounted purchase, offering a safety net for prospective augmented replacement expenses.

Leased vehicles introduce a distinct set of considerations, where the assurance of Vehicle Replacement GAP insurance becomes particularly pertinent. This coverage not only navigates the financial implications of a total loss but also ensures a seamless fulfilment of lease obligations without undue financial strain.

At Insurance Cloud we remain committed to providing our customers with a full understanding of insurance complexities, our aim is to assist individuals in securing coverage that not only meets regulatory mandates but also aligns seamlessly with their specific needs and at the best prices. So why not get a quote and compare quotes from us?

Do you need Gap Insurance? Compare GAP insurance quotes with Insurance Cloud today and entrust us to be your companion in the pursuit of unwavering financial protection at the best prices.

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