Finance glossary
GAP Insurance — Guaranteed Asset Protection
Also known as: Guaranteed Asset Protection
In simple terms
GAP insurance covers the difference between what your car insurer pays out if your car is written off and what you originally paid (or still owe on finance).
On this page
What does GAP insurance mean?
Guaranteed Asset Protection (GAP) insurance covers the shortfall that can arise when a car is written off or stolen. A standard motor policy pays the car’s current market value, which is often less than you paid or than you still owe on finance.
GAP cover pays that difference, within its terms.
How GAP insurance works
If your car is declared a total loss, your motor insurer pays the market value. GAP insurance then tops that up — for example back to the original purchase price, or to clear an outstanding finance balance, depending on the type of GAP policy.
It only pays out after, and on top of, a successful main insurance claim.
How could this affect me?
GAP can protect you from being left owing money on a car you no longer have, which matters most for new cars or those bought on finance. But it is not always good value, and dealers have historically charged high prices for it.
Compare standalone GAP policies against any offered at the point of sale, and check exactly what shortfall it covers.
Things to watch out for
- Point-of-sale GAP can be far dearer than buying it separately.
- It only pays out after a successful main insurance claim.
- Depreciation is steepest on new cars — check if you actually need it.
Know your rights
- FCA rules require GAP insurance to be fair value and give you time to consider it rather than being pressured at the point of sale.
- You can complain and escalate to the Financial Ombudsman Service.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- FCA, Guaranteed Asset Protection (GAP) insurance (opens in a new tab). Accessed 22 Aug 2026.