Claims data analysis from vehicle ownership and management solution MotorEasy has revealed that the average Guaranteed Asset Protection (GAP) insurance payout in 2024 was nearly three times higher than in 2021, highlighting significant financial risks for both dealers and vehicle owners.

The findings show that several factors are driving this trend, including rapid vehicle depreciation, rising new car costs, spare parts shortages causing more insurance write-offs, and increased vehicle theft. MotorEasy has documented payouts exceeding £20,000 for high-specification electric vehicles, which can lose 50-60% of their value within just two years.

The data also revealed that theft remains a major contributor to GAP insurance claims, with 41% of MotorEasy GAP claims over £15,000 being for stolen Range Rovers.

The ongoing spare parts shortage, a legacy of pandemic-era industry shutdowns, has led insurers to write off vehicles more readily as repairs become increasingly costly and complex.

Duncan McClure Fisher, CEO of MotorEasy’s parent company, Intelligent Motoring, said: “Our latest data paints a clear picture. The financial risks associated with car ownership are escalating.

“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.”