The Warranty Group has reported a ‘small but noticeable’ increase in dealer GAP sales since the Financial Conduct Authority (FCA) introduced a cooling-off period in September 2015.
In June 2015, the FCA revealed changes to the way dealers could sell GAP insurance, including a four day cooling-off period between consumers being given certain information and actually purchasing the insurance.The changes came into force in September 2015.
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At the time, some people worried that some dealers might struggle to cope with the tight deadlines the FCA had imposed.
One month after the changes came into force, however, The Warranty Group said it had seen an increased number of consumers looking for the product, saying the rule changes had already influenced consumer behaviour.
Now six months after the rule changes came into force, Chris Benham, business development director at Warranty Group said the growth has continued. He 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.
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By GlobalDataHe added that, although a few dealers decided to stop offering GAP at the end of 2015, there were signs some of these were reconsidering their position.
He said: "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."
