BMW Gap Insurance. The quick guide to saving money and understanding what you are purchasing.

Are you lucky enough to be considering the purchase of a new BMW? A typical main agent charges at least £400 for their gap insurance. Specialists in providing gap insurance offer the same cover at prices in some cases less than 75% cheaper than the dealers quotation. Worried the cover is not the same as the dealers? Don't worry. If your car dealer quoted you thousands for your car insurance cover you would run a mile and compare prices. Why should gap insurance be any different? It shouldn't. There are two reasons the dealer is so much more expensive than a specialised broker for the product. Firstly all insurance policies incur IPT (Insurance Premium Tax). This is the amount that is paid to the government on any insurance policy that you buy. This is the same for home contents and general car insurance. The dealer is taxed at a rate of 20% on the sale of the policy. A broker is only charged at the lower rate of 6%. This immediately gives them a saving of 14% that can be passed on to you the purchaser. Secondly there is the level of commission that a dealer makes from a policy. Typically this product is the second biggest profit centre for any dealership after the sale of the vehicle. It's not rocket science! One policy costs £100 and the dealer for the same policy is £400. That's a lot of commission to earn. Need a greater choice of policy than the dealer has offered? No problem. There are now on-line specialists who provide cover for all new and used BMW cars. Need a RTI Gap Insurance, Vehicle Replacement on Gap Insurance or have you bought your vehicle on a contract hire agreement. They provide all types of policies with a variety of claim limits between £5,000 & £25,000 to cover any vehicle at a massive saving over the dealers quoted prices. They only deal with major insurers that are fully FSA registered. There will be no difference between any Gap Insurance policy offered by stand alone insurers and the dealer. The only major difference will be the price. In some cases I have read testimonials where customers have been quoted £500 by BMW dealers only to find the same gap insurance with on-line for less than half the price with the same insurance company. The great thing with buying cover independently is that you get advice directly from the insurer. Rather than sales staff at a car dealers who are not specialists. In most cases the dealer only has only one insurance product to offer you, which is generally a 3 year offering, only covering the purchase price of the car. Probably not the best advice if you have a five year finance agreement.rnThe dealer product although it may be branded in a brochure with a BMW on the front will probably not even be a BMW insurance product. Most dealers shop around each year and look for the cheapest offering then produce fancy marketing material which you end up paying for. At the end of the day the name on the insurance policy is probably the last important item, as all insurers and their agents have to be by law registered with the Financial Services Authority. This means that you the consumer are then covered by the financial services compensation scheme in the very unlikely event the insurer fails. As an industry first there are now Gap Insurance providers offering a staggering five year policy on new and used BMW cars. There are no mileage restrictions. All that they ask is that the vehicle is under ten years old when you purchase the policy. Combine this with the fact all policies provide a £250 excess cover in the event of total loss. You can even transfer your policy if you decide to change the vehicle early. Most vehicles can be covered provided the cover is purchased within 180 days of ownership of the vehicle. Claim limits vary between £5,000 & £25,000 which is great as one size does definitely not fit all.