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Vehicle Replacement Gap Insurance

What is Vehicle Replacement Gap Insurance?


Combined Vehicle Replacement Gap Insurance from GapInsurance123 will pay the difference between your motor insurance market value settlement, at the point of loss, and the HIGHER at the time of the claim of:


1. The cost of the equivalent replacement car matching the original specification, age and mileage (on the day you purchased it).


2. The original Invoice Price you paid for the vehicle.


3. The amount outstanding on finance.



It must be stressed that the Combined Vehicle Replacement Gap Insurance cover from GapInsurance123 may be quite different from another VRI Gap Insurance policy you are offered elsewhere.

More about that later.


Why choose Vehicle Replacement Gap Insurance?


VRI Gap Insurance, or Vehicle Replacement Insurance, it is sometimes called, is an innovative and in our opinion the most comprehensive level of Gap Insurance cover available in the UK today.


More basic levels of Gap Insurance, such as Return to Invoice Gap or Finance Gap, are solely concerned with the financial aspects of your current vehicle. Vehicle Replacement Gap Insurance considers one other part. The cost of the equivalent vehicle may go up throughout ownership.


Vehicle Replacement Gap Insurance not only covers the potential depreciation on your current car. In addition, it also looks at covering the increased costs of getting you back to the equivalent standard of vehicle you first purchased if your car insurance company writes off the car.


How Vehicle Replacement Gap Insurance works by way of an example


Let's look at a hypothetical example - you bought a brand new Toyota Prius Buisness Edition Hybrid with rear Parking Sensors in 2020 and paid £31344

  • You buy it via a PCP finance agreement for three years, through a finance company or motor dealer.
  • You put down a £5,000 deposit with a £26,344 balance to finance.
  • You buy a three-year Vehicle Replacement Gap to match the length of time of the PCP.
  • Based on advertised PCP examples on Toyota UK with an APR of 4.9 % and using Magnitude Car Finance Calculator (data taken August 2021) we estimate (this is an example and used for illustration purposes only ) that your PCP settlement would be in the region of £21480.40


One year later, the vehicle is involved in a car accident and is written off by your motor insurer.

  • Your motor insurance payout based on how much the car is worth on the day of loss.
  • Glass's Guide values the car ( data taken from Glass's Guide August 2021) at £21250.
  • Parkers Guide value the car at £19690. (data taken from Parkers Guide August 2021) 
  • The cost of the equivalent, is now £33569 (data taken from August 2021)
  • The amount that you still have outstanding on your PCP agreement.


So how would a Vehicle Replacement Gap claim from GapInsurance123 work for this example?


The claims team would look at a few figures to calculate the claim amount. These would be:

  • The outstanding finance settlement amount (£21480.40)
  • The original purchase price paid (£31344)
  • The cost of the equivalent replacement vehicle at the time of the claim (£33569)



The policy will cover you to the HIGHEST of these three figures at the time you claim. In our example, the cost of the equivalent replacement vehicle is the highest at £33569.


This means that the Combined Vehicle Replacement Gap (VRI) from GapInsurance123 will cover the difference between the motor insurance payout (£21250) and the replacement cost (£33569), so a Gap Insurance £12319 settlement.


Why Vehicle Replacement Insurance Gap Insurance from


As we mentioned earlier, there can be distinct differences when comparing VRI Gap Insurance from GapInsurance123 to other products in the market bearing the name 'VRI'.


For example, Gap123 VRI pays a cash settlement to the highest of the finance settlement, the original price paid or the equivalent replacement cost. We will NOT force you to take a physical car we deem your replacement. We do not reduce your settlement to your original invoice price if you refuse our offer of a car of our choice.


Would you want the same car again if you had just been in a major accident in your vehicle? Maybe your vehicle was no longer suitable, and you were looking to change anyway. A cash settlement to the replacement cost could be thousands of pounds more than back to the original invoice price.


GapInsurance123 was the first online brand to bring this '3 in 1' VRI Gap product to the market in 2015. Since then, tens of thousands of consumers have taken this most comprehensive level of cover. We have also seen that many other online brands have altered their VRI Gap product to follow suit. We take that as quite a compliment!


The key features of GapInsurance123 Combined Vehicle Replacement Insurance

These will include:


  • Combined cover covers the HIGHER of the finance settlement, the original price you paid for the vehicle or the future replacement cost.
  • Up to 5 years cover available - for vehicles up to £75,000 invoice price online, £100,000 over the phone.
  • Transferable VRI Gap Insurance policy - you have one free policy transfer to an eligible vehicle per policy term.
  • £250 towards your own motor insurance excess - If the vehicle is written off, there is no excess on our policy to be deducted. We pay the first £250 of your vehicle insurance excess.
  • Covers All Factory Fitted Options
  • Includes cover for up to £1,500 of dealer fitted accessories
  • Covers theft with keys
  • You can buy cover up to 180 days after vehicle purchase from your dealer.
  • It covers all named drivers over the age of 18


Why is VRI Gap Insurance so popular now?

Vehicle Replacement Gap Insurance is an excellent choice for Gap cover for two reasons.

  1. The vehicle you drive away from your dealer will not be worth what you first paid in a few years.
  2. The cost of the equivalent model is likely to be higher in the future.


VRI Gap Insurance can cover both of these issues.


If you looked at the ever-popular VW Golf GTI TSI, the introductory list price in 2017 was £27,865. In 2021 the list price has risen to £34,175. That is quite a rise in just four years. Even some form of manufacturer discounts is unlikely to close that gap.


Also, perhaps you got a special deal from your motor dealers, like a 'VAT Free' or a 'Cashback' offer, that same deal may not be available next time around you may have to pay considerably more.


The advantage of a Vehicle Replacement Gap above a Return to Invoice Gap is that any increased costs of the equivalent replacement vehicle are covered as well as the depreciation on your current car.


Is a new car replacement the same as VRI Gap insurance?


No, a new car replacement is typically provided with your motor insurance for the first year when you buy a brand new car. Providing you meet a set of criteria, your motor insurer may provide you with a new replacement if they write off the vehicle within the 'new car replacement coverage.


Vehicle Replacement Gap Insurance is an additional policy that you buy to complement your motor insurance. In the case of GapInsurance123, it can provide cover for up to 4 years from your ownership of the vehicle.


Vehicle Replacement Gap Insurance from GapInsurance123 will not provide you with a new car either. Instead, it will pay you a cash settlement for the replacement cost by topping up the motor insurers settlement, should the primary motor insurer write the vehicle off.


What qualifies a car for VRI GAP insurance with GapInsurance123?


There are several eligibility factors that you must meet to qualify for a Vehicle Replacement Gap Insurance. Here are a few common ones, but please either call us to check or read the policy terms for full details. We will be happy to give you a Gap Insurance quote for VRI.


At the time you buy the policy:

  • Your vehicle must be less than four years old.
  • Your vehicle must be a passenger car (we do not cover motorbikes or commercial vehicles)
  • Your vehicle invoice price must be less than £100,000
  • All drivers for the vehicle must be 18 years old or over.
  • You must have a fully comprehensive motor insurance policy covering you for your vehicle's full retail replacement market value.
  • You must be buying, or have bought within the last 90 days, your vehicle from a VAT registered motor dealer.
  • You own the vehicle outright or have the option to written in into a finance agreement (PCP or HP)
  • Your car insurance must pay out the retail market value of the vehicle as an insurance payout and write it off as a total loss.


Is Vehicle Replacement GAP insurance for new cars only?


Yes we can only provide vehicle replacement for brand new cars, where you are the 1st registered keeper. If you would like a quotation please call 0800 194 4926 where a member of the team will be able to explore your options and potentially offer alternative cover from a different provider.


It is important to remember that the equivalent vehicle you are covered for is the same age and mileage as your car was when you bought it. If your vehicle were brand new (you were the first registered keeper), the matching car would be another brand new model, matching the same specification as your vehicle when you bought it.


Can you pay VRI GAP insurance monthly?


Yes, it is possible. With ourselves, you can either check out online via a PayPal account and apply for PayPal credit, or you can call us to see what other options may be available.


Is Combined Vehicle Replacement Gap the same as Combined Return to Invoice Gap Insurance?


No, they are different in what they can cover. A Return to Invoice policy is capped at the original invoice price you paid for the vehicle. A Vehicle Replacement Gap covers you back to the cost of the equivalent vehicle, even if that is higher than the original invoice price you paid.


What is an 'equivalent' vehicle that Vehicle Replacement Gap can cover you for?


The equivalent vehicle is a vehicle that is the same model, specification, age and mileage as your car was ON THE DAY YOU BOUGHT IT.


  • So if your vehicle was a brand new Ford Fiesta ST 2 when you bought it, then it is the cost of a brand new Ford Fiesta ST 2 on the day you make your claim.
  • If the vehicle you buy is a two year old Ford Focus Titanium with 12,000 miles on the clock, then it is the cost of a two year old Ford Focus Titanium with 12,000 miles on the day you make your claim.


Please note, the equivalent vehicle is ONLY a brand new one where you are the first registered keeper for the car you place on the cover.


Ex-demonstrators and pre-registered vehicles do not fall into the category of 'new'. You will be the second owner on the logbook (V5) in either case. So the 'equivalent' vehicle will be the same age and mileage as your vehicle was when you bought it.


For example, if it is an ex-demonstrator, six months old with 5,000 miles on the clock, then it will be another six months old, 5,000 miles one owner car when you make your claim that will be the equivalent.


What happens if the equivalent vehicle is no longer made?


This situation can happen where a manufacturer stops making a model in their lineup. There are a couple of possible options.


  1. Suppose the manufacturer has replaced the vehicle with a superseding model. In that case, the equivalent vehicle will be calculated on the superseding model now produced, with the same specification (or as close as is possible) to the original car.
  2. If the model has been stopped and there is no superseding model, there is no equivalent vehicle to work out a replacement cost against. In this case, the GapInsurance123 VRI Gap would take the original invoice price you paid and add 10% to this figure. This amount would then be used as the replacement cost in a settlement.


Please note, it is the determination of the claims administrator, and the insurer of the Gap Insurance cover what the equivalent or superseding model would be.


Is VRI GAP insurance available for a lease car in the UK?


This depends on what kind of 'lease' you have. Suppose it is a typical contract hire lease arrangement, where there is no option to own the vehicle written into the lease. In that case, Vehicle Replacement Insurance is not available or suitable.


If you have a contract hire car, you will need to look at a Lease and Contract Hire Gap Insurance policy.


Who are GapInsurance123?


  • GapInsurance123 is a trading name of Aequitas Automotive Ltd.
  • We are authorised and regulated by the Financial Conduct Authority in the United Kingdom (FCA reference number 821163).
  • Aequitas is a registered company in the UK. Our company registration number with Companies House is 006652.
  • Aequitas Automotive has a registered office at Aequitas House, 56 Hamilton Square, Birkenhead, Merseyside, CH41 5AS.
  • Aequitas Automotive Ltd is a registered insurance broker with the British Insurance Brokers Association (BIBA) membership number 006652.



Who is the insurer of the GapInsurance123 Combined Vehicle Replacement Gap Insurance?


From August 2021, the insurer of all Gap Insurance products has been arranged on behalf of by Avid Insurance Services Limited under contract reference B1406C000522100.


Avid Insurance Limited is an agent of Arch Managing Agency Limited.


Arch Managing Agency Limited underwrite this policy on behalf of a consortium of Lloyd's of London syndicates.


Arch Insurance International


Arch Capital Group Limited provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly-owned subsidiaries.


Business in the UK is written by Arch Insurance (UK.) Limited and/or Arch Underwriting at Lloyd's Ltd.


Built on Strength


With strong ratings for A-rated financial strength from A.M Best, Standard & Poor's and Fitch, Arch Insurance International represents a stable alternative for brokers and customers seeking fresh capacity.


Arch Underwriting at Lloyd's Ltd (registered in England and Wales – number 06645822) is authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and Financial Conduct Authority.


Arch Insurance (UK.) Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK.


Registered Office: 5th Floor, 60 Great Tower Street London EC3R 5AZ


Telephone +44 (0)20 7621 4500


Please visit for further information.


How is Combined Vehicle Replacement Gap Insurance from GapInsurance123 protected?


GapInsurance123 aims to provide you with complete peace of mind.


With the policy, the protection comes from the strength of the underwriter being A-rated and a Lloyds of London syndicate.


GapInsurance123 has over a decade of experience in the field of Gap Insurance. The brand is a trading name of Aequitas Automotive Ltd, a specialist broker who runs many brands in the ancillary motor product field.

Aequitas Automotive Ltd is authorised and regulated by the Financial Conduct Authority and carries net assets well above £1 million at the company's house.


Finally, protection by the Financial Services Compensation Scheme is available for qualifying customers, should the insurer fail.


Should you dispute or have a complaint regarding the policy, you can complain directly to Lloyds of London. Should you not be happy with the answer from Lloyds of London, then you can continue your complaint to the Financial Ombudsman Service in the UK.