News and views from the automotive industry.
Retailers on how change in GAP sales rules affected business
The Financial Conduct Authority (FCA) introduced new rules governing the way Guaranteed Asset Protection (GAP) insurance can be promoted and sold over a year ago. Since then, retailers have been getting to grips with new sales processes that incorporate the two main changes:
- Prescribed GAP information – the provision of set information given to the customer at the beginning of the sales process
- Deferred sale period – a minimum of two “clear days” between when a customer is first informed about a GAP product and when the transaction can be concluded.
Download our FREE eBook – FCA Regulation changes: have they affected GAP sales? – to learn more.
Have these changes affected sales?
As a leading provider of financial add-on services, including GAP insurance, Car Care Plan works closely with dealerships, manufacturers and affinity partners with regards to the marketing, sales and business management processes involved in the sale of our products.
We have always maintained a policy of providing customers with comprehensive information and support so they can make an informed decision before purchasing GAP insurance, or any other financial add-on product. We asked our retailer partners what effect the FCA’s new rules had on their sales:
“The changes have made customers more aware of the availability of other providers,” said one. “We have followed the FCA changes but still try to sell the benefits of the product to minimise the impact.”
Another said: “We operate a very strict sales process, controlled from start to finish by a business manager. Therefore, all vehicle, financial and insurance discussions are closely monitored so that we can only conclude on solutions relevant to that client. It has to be their choice EVERY time.”
Why have the changes had no adverse impact on GAP sales?
Car Care Plan’s overall GAP sales have increased by 7% since the FCA’s new rules were introduced in September 2015. The FCA had always stressed it was never their intention to restrict sales, only to ensure customers are being fully informed about what they are purchasing, so they can make the best decision for their circumstances.
Mike Cowling, Head of Products at Car Care Plan, said: “The far less aggressive closing process that now applies with the deferred opt-in period has certainly built trust in both the product and the motor dealers selling the product to them. This has also manifested itself in lower early term cancellations; reduced because customers are now given more time to consider the benefits GAP providers.”
More available in the latest eBook from Car Care Plan – download here.