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Vehicle Replacement insurance is another category which falls within the gap insurance. It is available for vehicles that are financed, on any sort of personal loan, or owned outright. GAP Vehicle Replacement can be offered to both private individuals and companies. Cars covered by this insurance can be up to five years old. The period of time for which this sort of GAP is available is 4 years from the date of the vehicle delivery. In the case of an insurance write off, the motor insurance provider will only pay to the car holder what they believe is the current market value of the vehicle – which is substantially less than the amount the owner previously paid for the car. The insurer will also pay a nominated dealer their settlement. The GAP Vehicle Replacement Policy will, in turn, pay to the dealer the difference in the value of replacing the vehicle with a new car of the same or similar specification as the original one or of similar age if the vehicle was not new when originally purchased. There is one negative thing connected with this kind of GAP though. Its coverage is sometimes restricted to a certain types of car and brands. What this means is that many will not offer GAP Vehicle Replacement on many sports cars or ones designed to carry more than 8 people or goods.