Managing director Shane Craig says the initiative was prompted by approaches from major dealer groups. “Savings can run into thousands of pounds,” he says. “We carried out an email survey on our customers who either switched their PPI to us or decided not to take PPI from their lender – we found they saved an average of £2,739.77.”
The Financial Services Authority has been critical of lenders that push PPI by encouraging consumers to believe the extra payments are a normal part of the offer. Consumer groups have said car buyers can save money by using independent insurers.
Craig claims that web-based Paymentcare.co.uk offers the best-value money policies on the market. “Unlike high-street offerings, there is no point-of-sale link between PPI and the loan, which ensures transparency and fair treatment for customers.”
Competition for PPI business is likely to grow as consumers become more aware of the savings. But two motor dealer businesses have been criticised for the way they sold PPI schemes: Midland dealer group Cathedral Motor Company was reprimanded by the FSA in February, two months after a similar rebuff for Eastern Western Motor Group.
Craig’s pitch to dealer groups is based on a pledge to ensure they adhere to the FSA’s “treating customers fairly” policy. The FSA is continuing to investigate PPI schemes across all sectors and is visiting 100 firms as part of its current enquiries.
“Payment protection insurance is an integral part of car finance,” says Craig. “It’s essential that motor dealers are aware of the PPI policies available to them.”