Falling car values see sharp rise in EV GAP cover

Falling car values see sharp rise in EV GAP cover

Demand for electric vehicle GAP insurance policies soars by more than 300% as drivers protect themselves against plummeting resale values

New data analysis by car maintenance, protection and repair expert, MotorEasy, has revealed a significant 303% year-on-year uplift in demand for Electric Vehicle (EV) GAP Insurance, which protects car owners against a potential shortfall in payout, in the event of an insurance total loss claim. The increase is believed to be in response to growing reports of EV values falling notably in the past year, which could see motorists significantly out-of-pocket if their vehicle is written-off or stolen.

“Owners of EVs have had a tough year. Not only have energy prices rocketed, but also insurance premiums have escalated as a result of increasing repair costs and vehicle thefts,” commented Duncan McClure Fisher, CEO of MotorEasy’s parent company Intelligent Motoring. “In addition, the EV used car market is getting more abundant and newer model values are falling, with Tesla in particular slashing prices. All these factors combined are driving down used EV residual values creating a worrying disparity between the vehicle’s original purchase price and value at the time an insurance claim is made.  As a result, more savvy motorists than ever are seeing the benefits of GAP Insurance and investing in its financial protection.”

If a car is written-off in a collision, stolen and not recovered, or stolen but found badly damaged and in turn, declared a total loss, a standard motor insurance will only pay out on the vehicle’s value at the time of the incident, not the price originally paid for the vehicle. GAP Insurance compensates for the car's depreciation and pays the owner the difference between their insurer’s payment and the original price they paid for the vehicle.

Duncan McClure Fisher concludes: “Those EV owners who fear a fall in the value of their cars are right to be concerned. We’ve had several recent EV total loss claims that proved the value of GAP Insurance. Take for example Tesla. We paid out a GAP Insurance claim of over £15k on a Tesla Model 3 Performance that had fallen in value by 31% in just 20 months. This policyholder would have been severely out-of-pocket if they hadn’t had the foresight to purchase GAP Insurance. With higher repair costs for EVs, a total loss claim can happen as a result of just a minor collision, making GAP Insurance protection even more important.” 

Intelligent Motoring’s 5-star Defaqto rated GAP Insurance, which was awarded an Auto Express Best Buy 2023, can be purchased by consumers through the MotorEasy digital garage.  It can also be white-labelled to retailers, finance houses and vehicle membership organisations as a value-add offering to build customer loyalty and retention.