GAP insurance pay-outs almost triple the 2021 average

MotorEasy data reveals significant rise in GAP insurance payouts amidst shifting automotive landscape

Posted on Jun 20, 2025

Claims data analysis by leading vehicle ownership and management solution, MotorEasy, reveals that the average Guaranteed Asset Protection (GAP) insurance payout in 2024 was almost triple what it was just three years earlier in 2021.

The findings underscore the growing financial risks faced by car owners due to rapid vehicle depreciation, rising new car costs, spare parts shortages leading to insurance write-offs and a surge in vehicle theft. Many of the causes of rising GAP payouts can be traced back to the impact of COVID-19.

The pandemic brought about a period of unusual appreciation in used car values, but values have been rapidly declining since then, particularly for electric vehicles (EVs) which can lose 50-60% of their value in just two years. While used values have been falling, purchase costs for new, more technically advanced vehicles have risen, further increasing the gap between the purchase price and the current market value and pushing up GAP insurance claims. MotorEasy has seen payouts exceed £20,000 for high-spec EVs.

The industry shutdown during the pandemic also led to a shortage of spare parts, the impact of which continues today. This shortage, coupled with the more complex nature of modern vehicles and the more costly parts required for repair, has prompted insurers to write off vehicles more readily. This means owners face a larger financial shortfall if their relatively new car is deemed a total loss.

Damage is not the only cause of a GAP insurance claim – theft can also lead to significant financial loss when a vehicle has depreciated significantly between purchase and theft. 41% of MotorEasy GAP claims over £15,000 were for stolen Range Rovers, where rapid depreciation has exacerbated the financial loss for owners.

"Our latest data paints a clear picture. The financial risks associated with car ownership are escalating,” commented Duncan McClure Fisher, CEO of MotorEasy’s parent company, Intelligent Motoring. “Making matters worse, economic pressures are leading drivers to delay maintenance and repairs, increasing the risk of mechanical failure and potential write-offs. In such cases, the depreciated value of a poorly maintained vehicle further widens the gap covered by GAP insurance. The combination of so many influential factors has created a 'perfect storm' where GAP insurance is no longer just a nice-to-have, but an increasingly vital financial safeguard.”