“It is frustrating that the Financial Conduct Authority (FCA) has turned a deaf ear to dealer concerns regarding changes to selling Guaranteed Asset Protection (GAP) insurance,” said Sue Robinson, Director of the National Franchised Dealers Association (NFDA), commenting on the FCA’s announcement of new remedies for competition in the GAP market. The NFDA represents franchised car and commercial vehicle retailers across the UK.
Robinson continued, “The FCA believes from their Market Study in 2014 that there is insufficient competition when car dealers sell GAP to consumers.
“The NFDA strongly dispute these findings. We believe there is good competition. Dealers offer the best service for consumers when purchasing GAP as they are able to advise consumers on products face-to-face; something online sellers simply cannot do.
“The NFDA have strongly lobbied the FCA on the proposed remedies, which include a deferment period before a dealer can sell GAP to a customer,” stated Robinson.
“We have gained some substantial concessions, primarily in terms of the deferment period, which has been revised down from the FCA’s original proposal of a 30 day period to 4 days.
“However, the FCA proposals still mean that in the future, consumers will be forced to delay acquiring GAP products and will be unable to conclude a purchase at the same time as they are arranging to buy a car. This will be damaging for car dealers’ business and create unnecessary delays for consumers.
“The NFDA is also concerned that the measures are rushed. The FCA wants to implement their proposals by 1 September 2015. This is simply insufficient time for dealers to ensure that they can comply with new regulations.”
NOTES TO EDITORS:
Susan Pollock, Research Officer
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The Retail Motor Industry represents the interests of operators in England, Wales, Northern Ireland and the Isle of Man providing sales and services to motorists and businesses. The RMI has a formal association with the independent Scottish Motor Trade Association which represents the retail motor industry in Scotland.