VW GAP insurance – is it worth it for a total loss?

Volkswagen cars are some of the most popular across the world, particularly in the UK. Their market share for 8.52% – a whole percent higher than the runner-up (2023). Moreover, there are 162,087 registered VWs in the country. Volkswagen cars are praised for their performance, comfort, design, and reliability. Moreover, they are a more affordable alternative to luxury brands such as BMW – another esteemed German manufacturer.

If you’re one of the thousands who choose to drive a VW, you’ll want to be able to replace it with a like-for-like model if the worst happens and it’s written off or stolen. The VW Golf is one of the most popular vehicles but also one of the most commonly stolen – more than the Mercedes C-Class, would you believe? Moreover the VW Tiguan and the VW Passat rank among the top 5 models most likely to be written off (2023).

Unfortunately, even a comprehensive motor insurance claim doesn’t cover everything after a total loss – you could face a significant shortfall in replacing your Volkswagen. Learn about how GAP insurance can help you afford a replacement vehicle after a write-off or theft, regardless of how you paid for it or where you bought it.

What happens if you write off a VW without GAP insurance?

A write-off can happen to anyone, at any time. In fact 12%, have written off a car in the past 5 years (YouGov, 2022). Your motor insurer pays up to the market value of the car at the time of the write-off but often this doesn’t cover the cost of a market value like-for-like replacement. The added cost of motor insurance excess or any outstanding finance also makes it harder to cover the cost of your next car.

If you pay for your car though a contract hire agreement, you may have a lease deposit to put down on your next car or outstanding payments to make. The motor insurance claim payout may also be inadequate to cover the full amount you owe to your car leasing company. This is where total loss GAP insurance comes in.

GAP insurance or Guaranteed Asset Protection insurance tops up your total loss settlement to help you afford a replacement vehicle whether you paid outright or via finance providers, or a leasing agreement. There are four types of GAP insurance meaning almost all cars can get cover from the leading GAP insurer.

What are the types of VW GAP insurance?

Four types of GAP cover are available to cover a range of vehicle types and purchase methods.

• Back to Invoice Plus is the most popular and covers up to the original invoice price of the car or the outstanding finance balance (whichever is higher at the time). You can use this cover for cars owned for less than 180 days and bought from a VAT-registered dealer for between £5,000 and £125,000. You can wait up to 365 days to buy cover if you have new-for-old replacement cover on your comprehensive motor insurance.

• Vehicle Replacement Plus covers up to the replacement cost or the outstanding finance, even if the price has increased since you bought your original car. You can use this cover for cars less than 7 years and 80,000 miles, owned for less than 90 days, and bought from a VAT-registered dealer for between £5,000 and £125,000.

• Contract Hire Plus covers the insurance shortfall, outstanding rental payments, and up to £3,000 towards your leasing deposit. To use this cover, you need to have collected your car within 365 days, it must be less than 10 years old and worth between £5,000 and £125,000.

• Agreed Value GAP insurance covers vehicle depreciation from the day you bought your GAP Insurance policy. We cover cars under 20 years but with any mileage; they must have a market value of between £5,000 and £75,000 – cars bought from private sellers or owned for longer than 365 days are eligible.

Which GAP policy is the best for you?

You may not be eligible for more than one policy but if you are, here’s a handy guide on how to choose the best policy

If you bought a used car – it’s likely that the price of a replacement will increase over time because used car prices are on the rise. If it’s eligible, you would be better off choosing Vehicle Replacement GAP insurance to ensure you can afford an equivalent replacement vehicle with your claim payout.

If you bought a new car at a discount, you will also want to choose Vehicle Replacement insurance to make sure you’re covered for the full, undiscounted price if the worst happens and you need to claim. Moreover, the replacement cost is based on an equivalent car to your original one, meaning it protects against inflation in the new car market.

Alternatively, Back to Invoice GAP insurance is great for protecting your initial investment and the claim payout is usually adequate for buying a suitable replacement vehicle. However, this policy doesn’t protect against vehicle value inflation. If you want a like-for-like model, or a brand-new replacement, there may be a small discrepancy to cover.

How much does VW GAP insurance cost?

Your unique quote will depend on which policy you choose/are eligible for, your vehicle’s make, and how much you bought it for (or its current market value if you’re choosing Agreed Value GAP insurance). Explore example quotes for popular VW models below – Back to Invoice GAP policies are based on new VW models.

Your model not listed here – make your own GAP insurance quote in seconds.

Is VW GAP insurance worth it?

Despite Volkswagen being one of the more reliable brands, they’re still vulnerable to a write-off or theft. Only 17% of Brits can afford a like-for-like replacement after a total loss and with the price of used cars increasing, it can be challenging to find a suitable car within budget.

VW drivers are our 6th-most common customer here at ALA Insurance and they pay, on average, £189.42 for a GAP insurance policy. The average VW payout is £3,134.42 which gives a policy benefit of 16.5:1. GAP insurance is a good idea to ensure you can afford a like-for-like replacement after a total loss and avoid other shortfalls such as depreciation, excess, finance gap, lease payments or deposits.

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Frequently Asked Questions

Can you transfer GAP Volkswagen GAP insurance?

Yes, you can transfer your GAP insurance cover to another vehicle with no admin fees. If you sell your car or it changes owners, there are several options.

• Option 1: transfer your GAP insurance policy onto your new vehicle and pay the difference in premium – you can do this in your My ALA account.

• Option 2: (usually preferable if the vehicle is being handed on to a family member) amend the policyholder details in your My ALA account.

• Option 3: cancel your policy and receive a pro-rata refund of any unused premium. Then, take out a new policy for your next car. This option is preferable if you want different cover or policy term. Bear in mind that your vehicle still needs to be eligible for the new policy.

How long does VW GAP insurance last?

Back to Invoice and Vehicle Replacement GAP insurance lasts up to 4 years. Contract Hire and Agreed Value GAP insurance policies can last up to 5 years.

What is the VW GAP insurance claim process?

If you’ve written off your car and need to make a GAP insurance claim there are several important things to consider before starting your claim:

• Avoid agreeing to a market value settlement from your insurance company until you’ve contacted us – we could negotiate a better deal for you.

• Make sure you’ve got the right GAP insurance documentation to build a valid claim – original invoice or lease contract, finance agreement and repayment history, comprehensive motor insurance documentation & total loss settlement information.

• Call our customer service team, email us, or start a claim through the My ALA dashboard – we aim to settle your claim and payout within 7 days.

Read about making a GAP insurance claim