Close Consumer Finance, a provider of finance packages and add-on insurance products to motor retailers, has reported an upswing in demand from car buyers for guaranteed asset protection insurance, in the face of rising vehicle theft.
Guaranteed asset protection (GAP) insurance, a type of vehicle credit insurance, protects car buyers against making payments on a car they no longer possess due to it being stolen or written off.
It covers the shortfall between the value placed on a stolen or written-off vehicle by the motor insurer and the amount required to settle the balance of the finance.
Car owners are liable for all the finance payments on cars that are stolen and written off or never recovered.
Close Consumer Finance development director James Broadhead said: "GAP is a relatively new product to the motor finance market yet it is proving very popular with buyers of used cars because it provides the consumer, the dealer and finance company with peace of mind that - should the car be stolen - then all parties are protected."
Close said, with over 340,000 cars stolen in the UK every year, GAP insurance was becoming increasingly popular as an add-on package.
It added that in 2000, its dealer network saw GAP insurance bought on 26% of cars financed for nine months, and 38% of cars financed for 37 months.
It said although figures for 2001 had yet to be finalised, they indicated even higher levels of GAP insurance purchases.
