Sales of Guaranteed Asset Protection (GAP) insurance policies appear to have stabilised, just over a year after the Financial Conduct Authority (FCA) introduced new regulations governing the sale of finance and insurance products.
During September 2015, the month after the FCA’s new rules were introduced, Dealerweb highlighted an immediate 11% reduction, year-on-year, in GAP insurance sales.
Dealerweb’s latest data shows that 20% of car buyers purchased a GAP insurance policy in 2016, compared to 21.5% of customers in 2015, equating to a 6% fall.
The average purchase price of a policy remained stable last year, with the price of a GAP policy averaging £410.31, just 1% down on 2015.
The findings are the result of a nationwide analysis by showroom management system provider Dealerweb.
It compared the volume of GAP sales achieved by the franchised dealer networks of 12 leading volume- and prestige-car manufacturers.
James Hill (pictured), Dealerweb sales director, said: “The data suggests that the FCA’s 2015 regulation changes have not had a deep, lasting impact on sales of GAP insurance products.
“With regulatory scrutiny expected to increase, showroom management systems can help dealerships safeguard compliance by prompting appropriate actions by sales staff.
“With the new mandatory cool-down period, sales teams can also use this technology to ensure a robust follow-up procedure is in place to stay in contact with those customers considering a policy, maximising the chances of a sale.”
Under the new FCA regulations, dealers are required to outline details of a GAP insurance policy at the earliest point in the sales process, then leave two clear days before concluding the sale – making it easier for consumers to shop around.
Businesses must also provide information advising consumers that they are able to source a GAP product elsewhere.