A NEW sales initiative is helping the RAC Dealer Network satisfy demand for Guaranteed Asset Protection (GAP) insurance from used car and van buyers.
Many of the network’s 1,300-plus dealers already have the relevant regulatory permissions to sell RAC GAP Insurance but now a pioneering arrangement has been made for the remainder to offer the product using a third party.
At the point of sale of the vehicle, the dealer can provide an RAC GAP Insurance information pack to the buyer and, if they indicate an interest through their marketing preferences, they are contacted to discuss the product and if appropriate progress the sale 24 hours later by a company called General Insurance Distribution Ltd (GID), who provide specialist call centre services for the financial services industry, offering high levels of compliance and expertise.
Lee Coomber, RAC Sales Agent Director at Assurant, which partners with the RAC in the dealer and aftersales sectors, said: “RAC GAP insurance is a five-star Defaqto-rated product. However, even though customers often express a desire for this kind of cover, a proportion of our dealers do not have the necessary regulatory approval to sell it.
“The structure we have put in place with GID allows this demand to be satisfied while ensuring that the highest compliance standards are met. We don’t know of any other dealer GAP arrangement that works in this way and believe it to be an innovation.
“At present, we’re seeing around 1,500 leads every month with a take-up rate of around one-in-six customers, which shows definite demand. We expect these numbers to build over the coming months as more dealers take part in the initiative.
“GAP has genuine value for customers, especially while car and van prices remain at historically high levels, and it’s potentially very useful for dealers to be able to offer it to their vehicle buyers, receiving a small commission if customers choose to buy this insurance product.
“The service also caters for dealers who have permissions to offer insurance and want to improve their sales penetrations and income from GAP.”
Coomber added that the GAP initiative was part of a wider drive by Assurant to look at new ways of offering products through the RAC Dealer Network.
Lee added: “We want to make it easier for our dealers to offer the complete portfolio of RAC aftersales products – not just warranties but GAP insurance, MOT insurance, tyre and alloy wheel cover and more – and we are actively looking at innovative ways in which new routes can be created from dealer to used car customer.”
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