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Singer & Friedlander push GAP to replace commission from VRI policies lost to 17.5% IPT

News that VRI (Vehicle Replacement Insurance) now incurs 17.5% Insurance Premium Tax will be a blow to dealers who rely on it for commission, says finance house Singer & Friedlander – adding that Guaranteed Asset Protection insurance can help ensure dealers don't lose out.

VRI has offered added protection to car buyers by ensuring that they received the price originally paid for the vehicle instead of just the market value, should it be written-off or stolen. It also helps dealers maintain overall profitability and customer retention. But the rise in IPT on VRI to over three times the original 5% means it will no longer be cost-effective for car buyers, and dealers - unable to absorb the tax increase - will forfeit this source of commission.

GAP insurance, which covers the shortfall between the finance agreement settlement figure and the comprehensive motor insurance payout, is built into S & F's finance packages, which buyers pay for by extending their finance agreement by one month, thus without increasing their monthly payments.

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