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Dealerships told not to fear GAP sales changes
Dealerships shouldn’t be adversely affected by changes to the rules surrounding GAP insurance, industry leaders have said.
The new GAP sales rules came into affect on 1st September but fears around their impact on the number of consumers taking up the product are unfounded according to many in the industry.
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Incorporating the changes
Tim Heavisides, Chief Executive of Car Care Plan, said: “If dealers are already handling their F&I sales in the correct way the new rules shouldn’t affect the process at the point of sale. The extra rules don’t need to slow the sales process.”
“At the point of order, just go through the demands and needs process that will already be in place and, as long as you’re familiar with the new rules, incorporating them into the conversation won’t be a problem.”
Others, including dealerships already implementing the changes into their sales process, echoed Tim’s sentiments. In an AM Online article, one dealership stated: “We’ll look back on these rules and wonder why we didn’t do it before because this is the right thing to do.”
For examples of how the new rules can be incorporated into your sales process, see our blog: Final call – GAP insurance sales rules change 1st September.
Impact on profits
GAP insurance is worth more than £160m in the UK, according to the Financial Conduct Authority (FCA), with top performing dealers achieving 55% penetration rate at the point of sale.
Tim said: “We hope dealer profits won’t be negatively impacted. Some dealers are walking away from GAP, but we don’t think the new rules are so burdensome that it warrants that sort of reaction.”
The FCA will enforce the provision of prescribed information to customers and a 4-day deferral period before a sale can be concluded. Dealers will need to be able to provide evidence of what information has been provided, with a clear audit trail in place.
Any dealership still unsure about the rule changes or how to implement them can contact Car Care Plan on 0344 573 8000 or send an email.