GAP insurance


What is GAP insurance?

As lease cars are typically brand-new and as such can lose up to 60% of their value in the first three years. If your car is written off during your lease, you may find that there’s a significant gap between the insurance payout (as this is based on the value of the car) and the amount you still owe on the lease. Your insurance payout will only be for the value of the car which means you may still have a sizeable amount outstanding on finance to pay the finance company. And with over 450,000 cars written off each year, this can be a real problem to some.

GAP Insurance from AMT

GAP insurance is designed to cover the shortfall between the amount you paid for your car and your insurer’s settlement figure based on the value of the car at the time of the claim. If your vehicle is written off and you have GAP insurance in place, you will receive the difference between the current value of the vehicle and the amount still owed to the finance company up to a specified limit.

Here’s a working example:

You lease an Audi A3 on a 2-year deal. 9 months into your leasing contract, you are in an accident and the car is written off. You’ve taken out GAP insurance cover so you don’t owe any finance on the vehicle that’s written off.

  • Cost of Audi brand new = £22,000
  • Value of vehicle when it was written off =£16,000
  • The amount owed to the finance company to end the finance agreement: £19,000
  • Your comprehensive market value insurance payout =£16,000
  • GAP insurance payout =£3,000
  • Comprehensive Insurance payout + GAP Insurance payout =£19,000

In this example, if you didn’t have GAP insurance, you would have to pay the £3,000 outstanding to the finance company. With a GAP insurance policy, you would be able to claim for £3,000 on the policy to cover the outstanding finance.

We partner with a company called Carbon Insurance Brokers who can provide you with GAP insurance for the duration of your lease agreement. Their GAP insurance product pays the difference between the motor insurer settlement and the outstanding finance on the vehicle (subject to eligibility). In addition to this, they also pay you up to £250 of your motor insurance excess in the event of a ‘fault’ claim. There’s also the option to cover you for up to three months rental payments to a maximum of £3000 (including VAT). This can come in handy as it will allow you to put this towards a replacement vehicle under a new contract hire or lease agreement.

What’s included in the plan?

  • Cover available for 12/24/36/48/60* months
  • Cover for cars, vans, and motor homes valued up to £125,000
  • Excess covered up to £250
  • Covers vehicles owned for less than 180 days
  • Fitted manufacturers’ accessories covered
  • Option to cover your advance rental/finance deposit up to £3,000 (Contract/Lease Hire GAP only)

*60 months is only available on Contract/Lease Hire GAP

Do I need GAP insurance?

Whether you decide to take out GAP insurance or not is a personal choice and depends on your attitude to risk. If you want to ensure that in case your lease vehicle is written off that you aren’t out of pocket, and that you can get a new vehicle on a new agreement with no debt from the previous agreement, then you may want to consider GAP insurance.

How much does GAP insurance cost?

The amount GAP insurance costs depends on a number of factors including the make and model of the vehicle and the length that cover is required. It can be anything from around £100 to £300. There are calculators online which can provide with you with estimates of what the likely costs will be. It’s also worth shopping around and getting a number of quotes from different insurers for comparison.

How do I apply?

If you’re interested in taking out GAP insurance as part of your leasing contract, then speak to an account manager and let them know. Alternatively, you can contact Carbon Insurance Brokers directly on

Phone icon 0333 0431300

Next steps

Just let your account manager know you are interested in taking out GAP insurance and they can arrange for you to get a quotation.

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