Gap insurance claims up a quarter

New data analysis by Intelligent Motoring has revealed a 24% rise in the value of GAP insurance claims from January to September 2022, compared with the same period in 2021.

It is now urging retailers, finance companies and motor organisations to reduce the financial exposure of customers, through the addition of fair value GAP insurance to their aftersales proposition.

Duncan McClure Fisher, CEO of Intelligent Motoring, said: “Although used car prices are currently at an all-time high, the SMMT has reported a second consecutive quarterly decline in used car sales. While this is in part due to used car stock shortages, the cost-of-living crisis is believed to be taking its toll on big-ticket purchases, which is likely to reverse the upward trend seen in used car residual values.

“This could leave hundreds of thousands of consumers who bought a used car at a peak price, finding themselves caught in a negative equity trap, if they write-off their vehicle before their fixed-term finance agreement comes to an end. However, for a comparatively low monthly fee, car owners can invest in guaranteed peace of mind against this financial risk.

“Indeed, those who have already safeguarded against this predicament have benefited from higher value GAP insurance claim payouts, demonstrating its success as a value-add product. Those in the automotive industry recognising the importance of providing affordable protection for their customers are also building greater customer loyalty and retention for the future.”