Cataclysmic Variables (CVs) are semi-detached binaries composed of a white dwarf orbiting a lower-mass K or M star. We investigate whether CVs are responsible for a new intriguing feature (the `hook') that appears in the Gaia DR3 colour-magnitude Hertzsprung-Russell diagram (HRD) when selecting sources with low extinction. We also aim to understand the location of CVs in the HRD based on the predictions of the disc instability model (DIM). The DIM is the foundation on which rests our basic understanding of stable (novae-like) and outbursting CVs (dwarf novae). We calculate the expected behaviour of CVs in the Gaia HRD taking into account the variable light contributed by the accretion disc, the companion, the white dwarf, and from the bright spot where the Roche lobe overflow stream from the companion intersects the disc. We find that the `hook' feature is most likely to be composed of CVs. The `hook' corresponds to the limited region where stable CVs (novae-likes) must be located in the HRD according to the DIM, with the bluest systems having the shortest orbital period. Unstable systems, giving rise to dwarf novae outbursts, trace counterclockwise loops in the HRD. The overall behaviour is consistent with the location of the various CV subtypes in the HRD. These results can be used as a basis to pinpoint interesting outliers in the HRD, either due to their location or their tracks. These outliers may signal new subtypes such as cold, stable CVs with truncated discs, or may challenge the disc instability model.