Warranty firm, The Warranty Group (TWG) has seen what it describes as a “small but noticeable” increase in dealer GAP sales since the introduction of new FCA guidance.
The increase in regulation by the FCA, which came in September 2015 was expected to reduce the penetration of GAP but according to TWG, the opposite has been true.
Talking about what he and his colleagues have seen, Chris Benham, TWG’s business development director, said, “We can’t speak for the market as a whole but we have seen a definite increase in GAP. We have recorded both a rise in GAP sales at existing dealers and have also won a number of new customers. The predictions of doom voiced by many commentators across the industry have failed to materialise.
“As a business, we don’t release commercial information but it would be fair to characterise this increase as small but noticeable.”
Benham said that the results were a vindication of The Warranty Group’s argument that a well-managed, customer-focused GAP proposition with a high degree of compliance would continue to find success.
“The fact is that we and our dealers have had to make very few changes to our processes to meet the FCA’s demands. Essentially, our offering was already very much centred on the customer and offered genuine value.”
A few dealers had decided to stop offering GAP at the end of 2015 but there were signs that even some of those were reconsidering their position.
“The fact is that GAP is a product that offers genuine benefit, especially in new and used car markets where PCPs are becoming the default method of acquiring a car. Customers recognise the benefits of GAP and dealers that fail to offer the product have a hole in their overall proposition.”
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