Understanding the Types of GAP Insurance - MotorEasy
If your car is written off or stolen, standard motor insurance will usually only pay out the vehicle’s current market value. Unfortunately, that amount is often less than what your originally paid or what you still owe on finance – leaving drivers significantly out of pocket.
This is where GAP Insurance comes in. GAP (Guaranteed Asset Protection) Insurance is designed to bridge the financial gap between your insurer’s payout and your original purchase price or outstanding finance.
There are different types of GAP Insurance, each specific to your ownership/ finance agreement. It’s important to know which is the right cover for you to avoid paying for protection you don’t actually need.
Below, we break down the main types of GAP Insurance and explain how they work.
What is GAP Insurance and Why are there Different Types?
This answer comes down to depreciation. From the moment you drive your car away, its value starts to fall. If your vehicle is written off or stolen, your motor insurer bases their payout on the car’s market value at the time of the claim – now what you paid for it, or what it would cost to replace.
This difference is known as the ‘GAP’, and GAP Insurance specifically exists to cover that shortfall, protecting drivers from sudden financial loss.
However, a ‘one size fits all’ cover doesn’t work. There are many types of cover that vary depending on the drivers circumstances. For example:
- New vs used vehicles – new cars depreciate faster in the first few years, while older cards already have a lower replacement value.
- Finance agreements – PCP, Hire purchase and Lease agreements all calculate risk and balances differently.
- Replacement expectations – Some drivers may want to replace their model, while others are solely interested in covering their finance.
Choosing the right type of protection ensures there are no gaps in your cover.
What are the different types of GAP Insurance?
Here is a clear breakdown of each GAP Insurance type available at MotorEasy:
Return to invoice (RTI) GAP Insurance
RTI GAP Insurance covers the difference between your motor insurer’s payout and the original price you paid for your vehicle if it’s written off or stolen.
This type of cover is typically popular with newer cars, where depreciation is at it’s steepest. In the first year, a vehicle can loose a significant amount of it’s value, meaning a standard payout at market value will leave you financially short. RTI steps in ensuring you receive the full amount you originally paid for the car, making it easier for you to replace your vehicle.
Return to value (RTV) GAP Insurance
RTV GAP Insurance covers the difference between your motor insurer’s payout and the agreed value at the start of the policy, rather than original invoice price.
This type of cover is commonly used for used cars, where the original invoice price may no longer be present/ available. Instead, the policy is concerned with the market value of the vehicle when the GAP policy begins, protecting against further depreciation.
This type of GAP can be a practical option for those who buy a used vehicle.
Contract Hire & Lease (CHG) GAP Insurance
Contract Hire GAP Insurance, often referred to as lease GAP, is designed for vehicles on a lease/ hire agreement. If a leased vehicle is written off or stolen, the finance company may charge early termination fees that are not covered by your standard insurer.
MotorEasy Contract Hire and Lease GAP Insurance can cover up to £15,000 towards the outstanding balance on your agreement. This typically includes:
- Up to £3,000 towards your initial rental payment
- Up to £500 towards insurance excess payments
- Up to £1,500 towards accessories cover
Depending on the policy, contract hire GAP insurance may also contribute towards excess mileage or damage charges, offering additional protection at the end of a claim.
Contract Hire/ Lease GAP is suitable both for personal and business leasing, offering peace of mind for those responsible for a lease agreement
Types of GAP Insurance: Key Differences Explained
The table below provides a simple comparison of the different types of GAP insurance MotorEasy offers, highlighting what each policy protects and who it is designed for.
| GAP Insurance Type | What Value it Protects | Who it's Designed For | Main Purpose |
| Return to Invoice (RTI) | The original invoice price paid for the vehicle | Owners of new/ newer cars | Helps replace the vehicle by covering early depreciation |
| Return to Value (RTV) | The vehicle's agreed value at the start of the policy | Owners of used cars | Protects against further depreciation after purchase |
| Contract Hire/ Lease GAP (CHG) | Outstanding lease or contract hirre costs | Personal and business leaseholders | Helps settle finance and termination charges rather than replace the car |
Now you’ve seen how the different types of GAP insurance compare, you can check which option is right for your vehicle and circumstances.
Key things to check before choosing GAP Insurance
Before choosing a policy, it’s important to check a few practical details to ensure the cover matches your vehicle and circumstances.
Start by confirming vehicle eligibility, including any age or mileage limits, as these can vary depending on the type of GAP insurance. It’s also worth checking the maximum claim limit to make sure it provides enough cover for your potential financial exposure.
You should also review the policy duration, which typically runs alongside your ownership or finance term, and understand how long the cover remains active. Finally, take time to understand the claims process and any key exclusions, such as time limits for making a claim or requirements around your motor insurance policy.
Ultimately, understanding the types of GAP insurance available - and how they differ - is the key to choosing cover that fits how you bought and use your vehicle, and avoids unexpected gaps in protection.
MotorEasy can help with these questions.
Types of GAP Insurance: Frequently Asked Questions
Are There Different Types of GAP Insurance?
Yes. There are different types of GAP insurance designed to suit vehicle owners, finance customers, and leaseholders, depending on how the car is purchased or funded.
What Is the Most Common Type of GAP Insurance?
Return to Invoice (RTI) GAP insurance is one of the most common types, particularly for new and nearly new cars.
Which Type of GAP Insurance Offers the Most Protection?
There isn’t a single “best” option - the right level of protection depends on whether the vehicle is owned outright, financed, or leased.
How Long Does GAP Insurance Cover You For?
A GAP Insurance policy will typically last three years, however, it is dependent on the policy you choose.
