Why GAP Insurance Pay-outs Are on the Rise - And Why You Should Care

30th April 2025

Let’s face it - GAP insurance (that’s Guaranteed Asset Protection) is one of those things you take out and hope never to use. Like a fire extinguisher or a first aid kit, it sits quietly in the background… until suddenly, it doesn’t. And when you need it, it really can be a financial lifesaver.

In simple terms, GAP insurance covers the difference between your car’s current value (what your insurer pays if it’s written off or stolen) and what you originally paid - or still owe on finance. Given that some cars lose up to 60% of their value in just three years, that “gap” can be huge.

And if our latest data is anything to go by, it’s getting even bigger.

Rising Payouts: The Stats That Speak Volumes

Here at MotorEasy, we’ve been crunching the numbers - and the trend is hard to ignore.

MotorEasy GAP claim pay-outs

Average GAP insurance payouts are almost triple what they were in 2021. So, what’s fuelling these sky-high claims?

Car Depreciation Is Back - With a Vengeance

Remember during the pandemic, when used cars bizarrely appreciated in value? It was a weird time. Supply chain chaos meant new cars were hard to come by, so second-hand cars became hot property.

Fast forward to 2025: the bubble’s burst. Supply has bounced back, prices are correcting, and used car values, especially for electric vehicles (EVs), are tumbling. In fact, some EVs are losing 50–60% of their value in just two years.

And when a car’s worth far less than what you paid for it, and it gets written off? You’ll be glad you had GAP cover. We’ve recently seen payouts over £20,000, particularly for high-spec EVs.

New Cars Cost More - And Lose Value Quicker

The average new car is now packed with emissions tech, ADAS safety systems, fancy dashboards, and expensive battery components. It’s no wonder prices have soared.

But with complexity comes risk - and high repair bills. Insurers are increasingly deciding it’s more cost-effective to write off a vehicle than to fix it. So that car you spent £45,000 on last year? If it’s declared a total loss, your standard insurance might only offer you £30,000. That’s where GAP insurance kicks in.

Parts Shortages = Write-Offs Over Minor Damage

It sounds unbelievable, but it’s true: an Audi was recently written off just because the headlight wasn’t available. That’s the world we’re in.

Thanks to global parts delays, even small repairs can now take months. Insurers don’t want to rack up courtesy car bills or deal with angry customers, so they’re declaring more cars total losses - especially newer, high-spec models. More write-offs mean more GAP insurance claims… and bigger ones.

Theft Is Soaring - Especially for Premium Models

According to the DVLA, 53,955 cars were stolen in 2024. That’s more than 1 every 10 minutes! And thieves are getting smart, targeting luxury SUVs and high-value models.

Case in point: 41% of MotorEasy GAP claims over £15,000 last year were for Range Rovers. Most were stolen. Because those cars also depreciate quickly, standard insurance payouts often fall way short of what customers originally paid.

Cost of Living = Costly Consequences

The economic squeeze means many drivers are tightening their belts - and skimping on car maintenance. According to Bumper’s 2024/25 Aftersales Report:

90% plan to keep cars longer
51% are switching to cheaper, independent garages
38% are skipping advisory repairs
15% have stopped servicing altogether

While that might seem sensible in the short term, it increases the risk of mechanical failure - and, ultimately, a write-off. If that happens, and your car’s not in tip-top shape, the value at the time of the claim will be lower. That’s when GAP insurance really shows its worth.

The Bottom Line: Don’t Get Caught in the GAP

We’re in a perfect storm: high car prices, rapid depreciation, rising theft, unpredictable repairs, and economic pressure on drivers. It’s no surprise that GAP insurance claims are climbing - and it’s clear this kind of cover is more important than ever.

At MotorEasy, our GAP insurance protects you from unexpected losses by covering the difference between what your car is worth and what you paid - or still owe. Whether your car is stolen, written off in an accident, or scrapped due to missing parts, we’ve got your back.