GAP is ‘still essential’

GAP is ‘still an essential part of the aftersales product portfolio’ as the FCA’s consultation period draws to a close, believes The Warranty Group.

Divisional director Ciaron Whelan said that most dealers who already have a structured approach to sales will be able to continue selling GAP in a broadly similar manner to today while satisfying FCA requirements.

He said, ‘The main point to stress is that, in our experience, the vast majority of dealers were already selling GAP in a responsible fashion, so they have little to make in the way of changes.

‘Most will simply have to change their sales structure in order to meet the FCA’s desire to provide customers with a period of time during which they can consider the merits of purchasing the product.

‘Really, the main impact will be that dealers will need to be able to provide clear retrospective evidence that they are adhering to the rules.’

Ciaron said that the biggest challenge was for the few used car operations that operate on a ‘deal and deliver’ model because the customer deferred opt-in period was so short.

He said, ‘It is difficult, though by no means impossible, for dealers who work on this basis to fit the four-day opt-in into their sales process, even though the FCA has agreed that the clock can start running from the point at which mandated information is provided to the customer.

‘However, for others, GAP remains an essential part of the aftersales portfolio. It is a product that will remain profitable and genuinely useful to the customer.’

Ciaron said that measures included in the consultation, which ends in March, were probably unlikely to change radically before they were enforced in September.

He said, ‘It is worth underlining that the FCA recognises that GAP is a useful product and that the point of sale is a sensible place to promote it. They are not by any means actively trying to discourage dealers from selling GAP.’

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