|September is one of the busiest months of the year for the UK motor industry with the launch of the new registration plate.
According to the Society of Motor Manufacturers and Traders (SMMT), September 2016 saw 469,696 new cars registered – a rise of 1.6% and the highest September on record.
Fleet registrations continued to grow, up 7.3% and there was increased demand for diesels and alternatively fuelled vehicles, up 2.8% and 32.6% respectively. Similar numbers are expected this year with around 80% of new cars being purchased on finance.
GAP insurance can be offered to new and used vehicles and can protect against a financial shortfall in the event a vehicle is written off. The motor insurer’s total loss settlement figure may not be enough to settle the outstanding finance on the vehicle, which could leave you with a significant shortfall. GAP insurance can clear this outstanding finance or return your client to the original invoice price of the vehicle.
Dealers will always offer GAP insurance with the vehicle, but they must now provide a 4 day deferment before they can conclude the GAP sale to allow the customer time to shop around. However, GAP sold by an Insurance broker is not an add-on and not subject to the same rules. Brokers can offer GAP the same day the vehicle is purchased and generally for less premium and only attracting a tax rate of 12% IPT instead of 20% for a dealer product!
For business customers GAP is particularly important. Over 70% of businesses have their vehicles on a form of lease arrangement and, unlike individuals, businesses have no protection under the Consumer Credit Act. As a result the termination charges are punitive.
As part of the TEn Network we can access a wide range of GAP Insurance Solutions such as
Purchase Price Protection
For more information or for a quotation please contact me.
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