Main dealers have been selling GAP insurance at vastly hiked premiums for years.
GAP insurance is designed to fill the gap between what you paid for your car and what your insurance company will pay you for it if it is written off months or even years after you bought it. It is sometimes called ‘Back to Invoice’ insurance.
This can be helpful if you are unfortunate enough to suffer a total loss and the value of your car is significantly less than you paid for it.
However, motor traders have been charging significantly over the odds for this financial product for years, trading on the buyer’s insecurities at the time of the purchase of an expensive vehicle.
For example, a GAP policy for a £25000 car to cover three years might cost £499 at a main dealer. A similar policy can be bought from an independent insurance advisor for under £200.
Finally, the Financial Conduct Authority (FCA) have almost certainly put a stop to these practices with their new Consumer Duty Regulations which will come into force on 31st July.
This is good news for motorists.
See here for more: https://www.motortradenews.com/leasing-finance/dealers-consider-exiting-gap-sales-under-new-consumer-duty-rules/