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The Financial Conduct Authority (FCA)’s publication of proposed remedies for the GAP insurance market has raised serious concerns for the National Franchised Dealers Association (NFDA) over the four day deferment period in which a dealer cannot sell a GAP policy to a customer.
Our primary concern is dealers being able to deliver the highest customer service. A dealer faced with a customer who is in the showroom having bought a car and wants to buy GAP insurance is going to have a difficult conversation with the customer if the transaction cannot be done there and then.
Explaining to that customer they will need to return to the showroom later in the week, perhaps on a day when they are at work, is not going to go down well and could potentially reflect badly on the customer’s perception of the service level the dealer is offering.
There is also another significant issue concerning finance. As the proposed FCA remedies stand, a dealer is likely to have to sell a vehicle to the customer and propose the finance as normal. However, if that customer decides they want to finance the GAP insurance, or (as is often the case) use some of their deposit to fund a GAP policy, it is likely the customer will have to have a further check for finance at the end of the deferment period.
This means potentially two finance proposals that will leave two credit footprints on a customer’s record and could potentially affect the customer in any future finance agreements.
Source: Motor Trader