When you are searching the Internet for information about Gap insurance you will often see comment such as ” my dealership gave me Free Gap Insurance ” or “get them to give it to you free ” better still ” We got free gap insurance as a deal sweetener”.
It is a common misunderstanding that dealership’s can give things away for free.
Sorry nothing in this world is for free.
Somewhere you are paying for it.
Free Gap Insurance, Free Mudflaps and mats.
No you do not have free gap insurance! Even your free cup of coffee has a cost! Your dealership has to pay for the gap insurance or the mudflaps or mats even the coffee. This means that they have to account for it. This means that there is a cost.
Instead what tends to happen is that your dealership will reduce or discount the cost of your vehicle still further and charge you the full amount for the so called free gap insurance. There is one very quick and easy way to check and this is by simply looking at your invoice.
As Gap insurance is non vat able it will be stripped out of the cost of your vehicle and shown separately. This is because your local dealership are legally bound to pay insurance premium tax on the cost of the policy.
So when you check you invoice you will see cost of car and the “free mudflaps ” then delivery and VAT normally any discount and then the true cost for the “free Gap Insurance ” policy.
So does this really affect you ?
Well yes as instead it would be more frugal and money saving to use the same powers of negotiation as you used on the purchase of your vehicle and apply them to sourcing your gap insurance. After all with on line gap insurance prices up to 85 5 less than main dealerships for the same if not better levels of cover why not take the discount on the cost of the vehicle and then source your gap insurance independently.