Gap Insurance.

[Deleted member 18588]

You have shamed yourself and furthered a stereotype.... You don't need to be a wizard, you just don't need to be an idiot.

I think you may have managed that yourself when you referred to banks in the same breath as professionals.

They are merely corporate bodies that through their High Street operations attempt to utilise their size and market presence to sell products to often unsuspecting customers. Those products are often unsuited to their customers' needs, carry high charges, some of which are hidden, and are being sold by sales forces that are often target and income driven rather than acting in their customers' best interests.

How you can be critical of car-dealers and Gap insurance when banks are still clearing up the PPI scandal, LIBOR fixing and unsuitable interest hedging products for corporate customers is beyond me.

 

[Val]

Yes you will still have outstanding finance but you would have if the vehicle was not written off or stolen so nothing has changed. You have a car worth the same second hand price and x payments left to pay.

Makes sense to a degree I suppose but would the finance be happy to repossess thiis replacement car in event of default?

 

[upsidedown]

Perhaps on the finance product you provide... calm yourself down, its a scam and your defence of it is worrying. Your industry needs to sort its self out.

I trust the views offered here

http://www.which.co.uk/money/insurance/car-insurance/guides/gap-insurance/should-i-buy-gap-insurance

 

[Alex1975]

There is a reason that the FLA(a body made to protect consumers) forbids car salesmen from pushing this product. What might that be?

 

[Smiffy]

For me it is a scam for a car dealer charge £300 plus for it when it is readily available aftermarket for far less.

You have the option of purchasing elsewhere though!
I pointed out in my very first post that we are only allowed to "mention" the GAP product we sell.
We make it quite clear that GAP insurance can be purchased elsewhere, and are in fact locked by a 4 day moratorium to prevent us trying to sell it before a customer has had a chance to look around.
I don't like the fact that the £1,300.00 telly I recently purchased in Currys most probably only cost them £700 or so.
It's called mark up or profit. And like everything you have a choice where you buy from.

 

[Smiffy]

There is a reason that the FLA(a body made to protect consumers) forbids car salesmen from pushing this product. What might that be?

To protect against mis-selling. Something started by the banks and PPI.
By the way, I've never heard of the FLA. FCA yes, but FLA?????
Who the hell are they?
And FCA regulations give the 4 day moratorium so that customers
a) Have a cooling off period
b) Can make an informed decision whether to buy the product or not
c) Can shop around for a like for like product.

 

[KenL]

You have the option of purchasing elsewhere though!
I pointed out in my very first post that we are only allowed to "mention" the GAP product we sell.
We make it quite clear that GAP insurance can be purchased elsewhere, and are in fact locked by a 4 day moratorium to prevent us trying to sell it before a customer has had a chance to look around.
I don't like the fact that the £1,300.00 telly I recently purchased in Currys most probably only cost them £700 or so.
It's called mark up or profit. And like everything you have a choice where you buy from.

To the unsuspecting customer who trusts their salesperson they may not realise you can buy GAP elsewhere.

Not once having been offered this at a rip off price has the salesalesperson mentioned that it is available elsewhere.

No doubt there is the greed that comes with commission, so why would they?

 

[SatchFan]

Bought my new car last year and my wife picks up her new one next week. Two different dealers, both offered gap insurance and both pointed out it was available elsewhere.

 

[Smiffy]

To the unsuspecting customer who trusts their salesperson they may not realise you can buy GAP elsewhere.

Not once having been offered this at a rip off price has the salesalesperson mentioned that it is available elsewhere.

No doubt there is the greed that comes with commission, so why would they?

They HAVE to nowadays. When a salesman sells you a car, he HAS to give you an initial disclosure document. This tells you who the company are and what they are authorized to sell as far as insurance products are concerned. This document quite clearly states that the products they sell are available elsewhere. If he doesn't give you this document he is failing in his duties under the treating customers fairly guidelines.

 

[Bunkermagnet]

I fail to see how an "insurance" can be viewed as a "scam" when it does what it says it will if called upon.
Perhaps the commision earnt on such products isn't enough for a finance salesman

 

[KenL]

They HAVE to nowadays. When a salesman sells you a car, he HAS to give you an initial disclosure document. This tells you who the company are and what they are authorized to sell as far as insurance products are concerned. This document quite clearly states that the products they sell are available elsewhere. If he doesn't give you this document he is failing in his duties under the treating customers fairly guidelines.

So, are car salespeople selling zero GAP policies these days?

 

[richart]

If a car salesman didn't mention gap insurance, and you subsequently had a shortfall, who would the first person be that you complained to ? To me a salesman mentioning it, advising that they can arrange it, or that you can get it elsewhere, looks to be giving you a good service.

If it was a scam, I would have expected the ambulance chasing companies to be already offering to get your money back.

 

[srixon 1]

If cars were not overpriced in the first place then there would not be a requirement for GAP insurance. :sbox:

 

[Smiffy]

Oh dear. I'm out of here

 

[Leftie]

By the way, I've never heard of the FLA. FCA yes, but FLA?????
Who the hell are they?

The Finance & Leasing Association.

You know, the people who provide finance for car purchase/leasing, televisions from Currys, amongst other things.

"In 2016, our members provided £118 billion of new finance. £88 billion of this was in the form of consumer credit to support purchases ranging from cars to household goods and £30 billion was provided to businesses and the public sector, representing almost a third of UK investment in machinery, equipment and purchased software in the UK last year."

Mind you, I'm sure that they are very altruistic and don't make any profit from their activities

 

[Piece]

Jeez, just caught up on this thread! Quite frightening reading opinions and viewpoints.

People use the term 'scam' wantonly. GAP insurance is not a scam. Let's get that straight. It stems from some having a problem that GAP insurance is somehow *secretly* bundled in by the dealer at a large markup. Probably that was the practice many moons ago, but not now. Yes, it is marked up and yes they get good commission from it. If the buyer is told the full story and client still wants it, then a great sell by the dealer.

As Smiffy has stated, regulations have changed when offering GAP at the dealers. You have the option to source your own, and yes, at a much cheaper rate. The buyer makes their own decision based on the facts given to them. The dealer can't advise on whether your insurance negates GAP - that is down to the buyer to know.

Having previously had a car written off years ago and now the owner of two new cars on finance, I declined the dealer offer of GAP on their finance scheme. I've sourced my own at a good price. Having the right GAP insurance to match the financial T&Cs of the hire purchase agreement is absolutely vital. Read the T&Cs of your agreement and the policy wording on the GAP insurance to see if it fits your need. There are several types of GAP vehicles around, the main three being: finance gap, return to invoice gap and vehicle replacement gap. I have gone for the R2I (Return to Invoice) GAP insurance, that covers me for my financial commitment and will leave me money to get a new car, should the worst happen with the car. For something like £1 a week for 4 years, it's really a no-brainer.

I saw one comment in this thread saying if the example car is written off you get a 10k cheque and you can still pay off the finance monthly repayments as if nothing had happened! . In the PCPs I've seen and certainly the ones I have now, once that car is written off, you are LIABLE FOR THE WHOLE FINANCIAL AMOUNT IMMEDIATELY. You can't keep paying it off regularly as the finance company have no interest because the asset has gone - they just want their money.

GAP is not for all as buying schemes are different. However, you are brave man or woman to take out a chunky finance package, not get GAP and/or rely on your insurance to bail you out.

 

[Val]

Good post but as we see on this thread, experience and knowledge count for nothing unless you work in finance

 

[Smiffy]

And are pig ignorant

 

[Big_G]

Went to look at buying a new car on a PCP last night, salesman comes back with the finance quote

Salesman: "Oh btw I've added the Gap Insurance for you, because you'll need that in case of a shortfall" £399

From what I read elsewhere, and after reading Smiffys posts I believe this is not allowed?

It's a pity we don't have a few more like Smiffy in the industry, as he seems to put his point across well.

 

[Blue in Munich]

Went to look at buying a new car on a PCP last night, salesman comes back with the finance quote

Salesman: "Oh btw I've added the Gap Insurance for you, because you'll need that in case of a shortfall" £399

From what I read elsewhere, and after reading Smiffys posts I believe this is not allowed?

It's a pity we don't have a few more like Smiffy in the industry, as he seems to put his point across well.

They tried that when I bought the motorbike and it was politely declined, they asked me to sign something to the effect that I'd been offered it, understood it & declined it, which I did, and then bought it elsewhere for considerably less. My suggestion would be to do the same.

And you're right, Smiffy's a good 'un.