Lease Car GAP Insurance - Windmill Leasing

You might assume that your car insurance plan fully covers you for the full cost of the leased vehicle? That’s not always the case.

When taking out your next car lease or car finance agreement, GAP insurance might be a clever financial move in the event of having to call upon your insurance company for a claim.

GAP insurance explained

GAP insurance can be invaluable to you for the protection of the early years of your car’s life if you lease a car. That’s because if you suffer the loss of your car, either by theft or by crash and a write off, then GAP insurance will pay the difference between the actual cash value of the vehicle and the current outstanding balance on your lease.

You need to consider that there could be quite a shortfall between those two numbers, depending on the car’s depreciation and the outstanding period on the lease agreement. Ultimately, it is you who will be responsible for this shortfall. Therefore, for ultimate peace of mind, add on a GAP insurance policy to pay the finance company any outstanding amount.

How does GAP insurance work?

Here’s a step by step account of how lease GAP insurance works (using fictitious numbers):

1. You agree a leasing contract on a car that costs £20,000.
2. You purchase GAP insurance from Windmill Leasing as a separate agreement charged through a one-off fee agreed at the outset of your leasing agreement.
3. You purchase car insurance (comprehensive and collision) with a £500 deductible to protect you against damages and loss.
4. After paying the down payment of £1,000 you still owe £19,000 in rental payments on the car.
5. You have an accident while you still owe more on the car than it is worth, and your vehicle is written off.
6. The insurance company determines that the actual cash value of the car is only £17,000 but at the time of the loss you still owe £18,500.
7. GAP insurance pays the difference plus your deductible (£1,500 + £500) totalling £2000 (not all GAP policies pay the deductible).

Is there a maximum amount GAP insurance will pay?

Customers can select a claim limit to suit the cost of their vehicle. Claim limits can vary from £5,000 to £25,000 per vehicle. Our dedicated account managers are on hand to advise you on your limit.

So why choose GAP insurance?

If your vehicle has been written off by a crash, an accident, theft, fire, flood or vandalism, then your insurance company will typically pay out the actual cash value of the car. That will more than likely be a lot less than the actual retail worth of the vehicle, or the amount you still owe for your lease. GAP insurance pays the difference meaning that you’re not left out of pocket.

How do I add GAP insurance to my leasing agreement?

Purchasing GAP insurance is simple. Just let your account manager know that you would like to purchase GAP insurance when getting a quote or arranging the contract and they will talk it through with you. Remember that GAP insurance is charged as a one-off fee and is purchased as a separate agreement at the outset of your business car lease.

Call 01527 571610 or request a call back to get a GAP insurance quote. Don’t forget, we’re here to help.

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