Dealers and manufacturers are being advised to review their return to invoice products to ensure there is not a shortfall in customer payouts.
The alert from Mike Macaulay (pictured), head of corporate sales at AutoProtect, centres on the approach of RTI providers to finance deposit allowances (FDA) and scrappage scheme allowances.
He said: “In the event of a claim for RTI insurance, our approach is very straightforward - we pay the customer based upon the invoiced price of the car involved.
“Contributions such as FDAs have no bearing on this decision.
“However, we have become aware, through the dealer network, that this approach is not universally shared by all providers, with FDA allowances being discounted from the customer payout.”
RTI payouts made with the FDA discounted mean that the customer may be unable to replace their written-off car on a like-for-like basis, without finding the extra FDA allowance from their own resources.
One dealer has spoken of a £2,000 gap created by the deduction of an FDA in one recent payout.
It is a potential financial and reputational issue for dealers, manufacturers and insurers.
“I would encourage all dealers and OEM finance providers to verify that the RTI products they offer demonstrate the type of transparent approach that will benefit all of us in the long-term,” Macaulay said.
“If T&Cs need to be updated to take account of FDAs and scrappage allowances, then affirmative action needs to be taken.”