GAP (Guaranteed Asset Protection) insurance
It’s been nearly three years since the rules for selling GAP insurance from dealers changed.
GAP (Guaranteed Asset Protection) insurance has been a staple additional product for motor dealers for many years. In its most basic terms, the policy exists to plug any “gap” between the outstanding finance on a vehicle and the insurance company offer in the event of a total loss (write-off).
Few commercial insurance policies will replace a used vehicle with a new one so having an insurance that will clear any finance balance is an important one to have for protection of your business (no need to make provision in your Profit & Loss figures and saves the arguments with insurers when a claim is settled).
However, when the Financial Conduct Authority (FCA) investigated how motor dealers sold GAP insurance they found some unfortunate selling practices; high-pressure sales (forcing customers to immediately sign up for the offered policy), huge mark-ups on the price of the GAP policy (to the extent the dealers were earning more from selling GAP than on the vehicle itself) and the features, benefits and even the term of the policy not being revealed or explained.
The new regulations put rules in place to protect the customer and ensure they get a fair deal. A dealer can no longer sign someone up to GAP immediately but instead, have to wait two clear days before the insurance is incepted. They must also advise that GAP cover is available elsewhere and whether it is optional or compulsory.
M R Ratcliffe Consultants have different GAP policies available for Owner Operators with a single vehicle to Fleets of 3+ vehicles. If your vehicle is less than 10 years old, on finance, leased or bought outright, we can quote you GAP with cover enhancements to maximise your protection. 01242 544544 or visit our website www.ratcliffes.co.uk