In the 12 months since the FCA introduced new rules on the sale of GAP insurance, product sales have increased and helped consumers to think about quality first, a recent report has found.
Originally met with some uncertainty about what the new regulations would mean, the last year has proved to be a successful move and has helped to allay the concerns of car finance providers and car dealers across the UK.
The new rules that the Financial Conduct Authority (FCA) put in place meant that dealer processes were in some cases required to adjust, so that each dealer would be uniform across the board in the way they sell GAP (Guaranteed Asset Protection) to consumers.
With training and useful materials to assist dealers in what would be required of them, analysis of the now implemented changes and how they have impacted the UK automotive industry shows that while the entire industry is still adjusting, GAP sales are on the rise. This is something which Creditplus have found, with a year on year increase of GAP sales of 12%.
GAP insurance works by covering the shortfall between the remaining finance on a vehicle and the amount that the insurance company claim your vehicle to be worth if your car is stolen or written off. It is available for new and used vehicles that are purchased with a car finance product.
Prior to the new FCA rules, consumers would have received different experiences of the sale of their GAP insurance. With the rules being applicable to each car finance and car provider, consumers now receive the same service. The increase seen by Creditplus falls in with the report’s findings that consumers are becoming more influenced about quality rather than price.
Speaking about the new GAP regulations and the increase within Creditplus, Shaun Armstrong, Creditplus’s Managing Director, commented: “These new guidelines stop GAP insurance being sold at point of sale. Offering these products between two and 60 days later means the consumer has more time to consider the option and make an informed decision. We see these changes as having a positive effect, both for the consumer and the GAP insurance companies.”
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