GAP insurance is continuing to boom as more consumers face the reality that their insurers are unlikely to pay out on the full value of their vehicles in the event of a write-off.
It is now more affordable than ever and consumers are reassured by the improved protection provided by the FCA.
With new cars potentially losing up to 60% of their value after three years, it’s no surprise that sales of GAP products are on the rise. According to our figures, GAP products sold through dealers have increased 28% year on year.
We are also seeing a growing trend for consumers to opt for a combination of traditional GAP and Return to Invoice products to fully protect their assets.
GAP insurance can provide worthwhile cover, but only if consumers choose the right policy.
Frequently GAP cover is competitively priced, but consumers are often attracted to cheap policies, through small online brokers, which provide limited or no cover in reality.
Dealers have a great opportunity to educate consumers about what to look for when purchasing GAP insurance and upsell reputable GAP insurance products.
While consumer appetite for GAP products is growing, this is against a back drop of increased regulation by the FCA.
What is clear is that dealers need to fully understand the policies they are selling and ensure they are working within the FCA regulations.
If dealers partner with professional and reputable GAP providers who provide them with up-to-date compliance training and support, dealers have a great opportunity to boost their profits from GAP insurance sales.
Robert Dockerill is CEO of Autoguard Warranties