Is GAP Insurance Worth It for Lease Cars? 

When you lease a car, you get to enjoy the latest model without the long-term commitment or the hassle of selling it later. But have you thought about what happens if your leased car is written off or stolen before your contract ends? That’s where GAP insurance, short for Guaranteed Asset Protection, comes in. 

We’re going to explain what GAP insurance is, how it works for lease cars, and when it’s worth having. We’ll also cover the scenarios where you might not need it, the pros and cons, and how we at Motorlet can help you add it to your lease deal. 

What is GAP Insurance?

GAP insurance is a specialist type of cover that protects you financially if your car is declared a total loss (written off) after an accident, fire, flood, or theft. 

Your standard motor insurance will only pay out the current market value of your car at the time of the claim. Because cars depreciate quickly, this payout is often much lower than the amount you still owe on your lease contract. 

GAP insurance essentially “bridges” the gap between your insurer’s payout and what you still have to pay to settle your lease. 

For example: 

If you lease a car worth £40,000 and after 18 months, it’s been stolen. Your insurer has now valued your car, and it comes out as £28,000. Without GAP insurance, you would need to pay the £12,000 difference to your leasing company yourself. However, with GAP insurance, that £12,000 is covered. 

Learn more about Contract Hire or Lease Guaranteed Asset Protect (GAP) Insurance.

• How does it work?

• What’s included?

• What’s not included?

• How do I pay for it?

• When does it start and end?

• How do I cancel?

• What do I need to do once I’ve got my GAP?

• FAQs

How GAP Insurance Works for Lease Cars

When you take out a Motorlet GAP Insurance policy alongside your lease, you’re protecting yourself against the risk of being left with a large bill in the event of a total loss. 

Here’s how it works step-by-step: 

1. You lease a car from Motorlet. 

2. You take out GAP insurance at the start of your lease. 

3. If your car is written off or stolen, your main insurer pays the market value. 

4. GAP insurance then pays the remaining lease balance owed to your leasing provider. 

Because lease cars remain the property of the finance company, they’ll expect full settlement even if the vehicle is gone. Without GAP cover, that cost is on you. 

Why GAP Insurance is Worth It for Lease Cars

Leasing is already a smart way to drive a brand-new car without worrying about depreciation. But in the event of a total loss, depreciation becomes a real financial risk. 

Here’s why GAP insurance can be especially valuable for lease drivers: 

• Covers depreciation: New cars can lose 40% or more of their value in the first year. 

• Protects your finances: Avoid paying thousands out of pocket to end your lease early. 

• Keeps your credit score safe: Not having to take on extra debt to settle your lease. 

• Peace of mind: Drive confidently knowing you’re covered for worst-case scenarios. 

When GAP Insurance Might Not Be Necessary

We believe in being transparent. While GAP insurance is a smart choice for most lease customers, there are situations where you might not need it: 

• Short-term leases: If your lease is under 12 months, depreciation impact is lower. 

• Fully comprehensive “new for old” cover: Some insurers will replace your car with a brand-new one if it’s written off within the first year. 

• Low mileage and low-risk usage: If you barely drive the car and store it securely, your risk of a total loss is lower (but never zero). 

Always check your main insurance policy before deciding, we can help you review it so you’re not doubling up on cover. 

GAP Insurance and Depreciation: The Numbers

Understanding car depreciation helps explain why GAP insurance is often worth it. Over three years, a car’s depreciation, on average, can look like this: 

• Year 1: 20 - 40% loss in value. 

• Year 2: Additional 15 - 20% loss. 

• Year 3: Additional 10 - 15% loss. 

If you lease a £40,000 car, it could be worth just £22,000 after three years, but your lease balance might still be higher. GAP insurance ensures you’re not responsible for the difference. 

The Cost vs. the Risk

One of the common questions we hear is: “If I’m already paying for fully comprehensive car insurance, why pay for GAP as well?” 

The answer comes down to risk. Standard insurance is there to replace your car at its current value. GAP is there to protect you from lease settlement costs. 

For most lease drivers, the cost of GAP insurance is small compared to the potential payout. You’re essentially paying a modest amount for the security of knowing you won’t be hit with a bill running into thousands of pounds. 

How GAP Insurance Works with Motorlet Leasing

When you lease through Motorlet, adding GAP insurance is simple. We’ll explain the benefits, check your existing insurance, and set up your cover so it runs for the full length of your lease. 

• Works for personal leasing and business leasing. 

• Tailored to the make, model, and value of your leased car. 

• Can be included at the start of your lease for convenience. 

Is GAP Insurance Worth It? 

For most lease drivers, yes, GAP insurance is worth it. It’s a relatively low-cost way to protect yourself from a financial headache if your car is stolen or written off. 

Leasing already gives you flexibility, convenience, and access to the latest cars. GAP insurance adds another layer of security so you can enjoy your drive without worrying about what-ifs. 

Protect Your Lease Car with GAP Insurance from Motorlet 

If you’re leasing a car through us, we can help you set up the right GAP insurance from day one. 

Get in touch with our friendly team today, read our latest guides, or visit our FAQs page to help you with any further questions or concerns.  

Frequently Asked Questions