What Is GAP – Loan Equity Insurance?

A Gap policy covers some of the difference (the gap) between a total loss payout on your vehicle by your comprehensive insurer and the balance owing under your credit contract. This is called a loan equity shortfall.

  • GAP can only be purchased in conjunction with a credit contract (view our finance options), and in the event of a total loss that credit contract must still be active.
  • The vehicle must be comprehensively insured (read more on vehicle insurance)
  • The contract is for a maximum of 60 months or the length of the original credit contact.
  • Can only be taken out at the time of vehicle sale.

Additional Benefits Include:

  • Comprehensive Motor Vehicle insurance premium in relation to the replacement vehicle.
  • Any Excess in relation to the total loss vehicle.
  • On Road Costs comprising of dealer delivery and registration related to the purchase of the replacement vehicle.
  • Deposit for a replacement vehicle up to $1000.
  • Reimbursement for out of pocket expenses up to $200
  • Any amount relating to a prior debt included in the credit contract.
  • Reimbursement for the cost of hiring a rental vehicle for a maximum of 5 days.
  • Additional benefits only apply to Options 1, 2 and 3.
  • Option
  • 1
  • 2
  • 3
  • 4
  • Max Benefit
  • $20,000
  • $15,000
  • $10,000
  • $5,000
  • Additional Benefits
  • $5,000
  • $4,000
  • $3,000
  • $1,000

Example of a GAP Claim

You have an accident in your vehicle and the comprehensive insurer deems the vehicle to be a total loss. The insurer pays out to the financier, leaving a $5000 outstanding balance on your credit contract that you are liable for and which must be paid immediately. If you had GAP Cover, it would provide a payment of the outstanding amount less the comprehensive insurance premium and the original GAP Cover premium saving you potentially thousands*.

Purchasing a replacement vehicle can also be an expensive exercise which is where the additional benefits under options 1, 2 and 3 really help out.

*Example only. There may be other deductions depending on the status of your credit contract.

If you are interested in finding out more about the GAP – Loan Equity Insurance cover and how it can apply to your vehicle purchase, please contact our Business Manager on 03 377 7144 or via our contact form.