The majority of dealers are giving GAP insurance sales a miss in the wake of FCA scrutiny.
That’s the view of warranty firm Intelligent Motoring which estimates that 90% of dealers are not advertising GAP products.
GAP came under scrutiny from the FCA which paused sales for a period.
Duncan McClure Fisher, CEO of Intelligent Motoring, said: “With vehicle values normalising after COVID, and electric vehicle residuals declining, claim payouts are regularly exceeding £20,000 to £30,000, demonstrating the critical protection GAP Insurance cover provides.
“Many retailers appear hesitant to sell the product, with only around one in ten advertising it to customers.
“This may be due to increased net rates and capped retail premiums, but flexible solutions are available to ensure dealers can offer fair value products that protect consumers, foster invaluable customer loyalty and provide an all-important revenue boost.”
The GAP Insurance investigation has reinforced the importance of transparency, compliance, and customer-centric sales.
Duncan McClure Fisher continued: “During the investigation, while GAP Insurance sales were paused, the motor retail industry demonstrated its impressive ability to adapt and thrive. Some offered alternative value-added propositions such as Cosmetic, Tyre and Battery Insurance or Insured Breakdown Recovery to support customers.
“This incredible agility demonstrates that GAP Insurance can be effectively reintroduced by retailers to rebuild revenue. Careful pricing, effective compliance measures, and efficient integration into the sales process, means that they can confidently and successfully offer a GAP Insurance programme.
“We have been delighted to find fresh demand from consumers for our MotorEasy offering, some claiming they had been holding out on their next vehicle purchase until GAP Insurance was available again. We encourage those retailers hesitating to make a GAP Insurance return to seize the opportunity.”