For dealers offering vehicle finance, 2014 has already proved to be a period of transition due to the change in industry regulator to the Financial Conduct Authority. The FCA’s focus is on consumer protection and transparency.
As well as amending the ways dealers must offer vehicle finance, the FCA has raised the area of guaranteed asset protection (GAP) insurance as part of its first market study. The regulator found that consumers had a poor understanding of GAP policies and product coverage, and didn’t receive value for money, partly because of a lack of competition.
The FCA is therefore proposing a major change to the selling model. The change would mean that the sale of GAP insurance cannot be concluded at point of sale of the vehicle, but only at a later point, and that the consumer must be given information about alternatives if the product is offered at point of sale. There are also plans that would require dealers to publish claims ratios to highlight product value.
―Courtesy Motor Finance
