The Financial Conduct Authority’s study on GAP insurance was flawed and got the result the FCA was looking for, according to Louise Wallis of the National Franchised Dealers Association.
Speaking at the Used Car Cross Industry Forum, Wallis said that the FCA had overlooked the added benefit to the consumers of dealing with a dealer rather than online, and a lack of appetite by insurers to sell GAP away from dealers.
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In addition, she said, the FCA overlooked recent changes to the GAP market, such as enhanced cancellation rights, and different insurance premium tax rates for dealers compared to stand alone.
The resulting regulation contained flaws including a short timeframe until implementation (the new GAP regulation is due to come into force in September 2015), and problems evidencing customer instigated sales.
However the new rules were unlikely to kill off the GAP market, and Wallis pointed to dealer adaptability as a way for the market to develop. In addition, she said the NFDA was working on GAP sales process guidance for dealers.
Other speakers included Derren Martin, senior editor of CAP Black Book, who told those present to expect an increased pressure on prices, though not to expect anything as severe as 2010 and 2010 prices, and Miles Trower, from TLT Solicitors who spoke about the Consumer Rights Act.
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By GlobalDataRupert Pontin, head of valuations at Glass’s, also took to the stage, to provide an overview of the market, while Jonathan Higham from British Car Auctions told dealers about the vehicle grading system the National Associations of Motor Auctions uses.
