New figures released by leading Gap Insurance providers Aequitas Automotive claim to show that an increasing number of UK car buyers are now turning to independent brokers for their Shortfall Gap Insurance provisions. Aequitas run two of the leading independent Gap Insurance brands in the UK today, Easy Gap and GapInsurance123. Both of these brands were featured in the Which report into Gap Insurance in 2012.
The report states that in 2012 the rate at which customers convert to a gap insurance sale of the brand websites has doubled when compared to previous years. Aequitas believe this is a clear indication that UK consumers are now becoming more savvy in their choice of Gap Insurance supplier.
The Which report earlier this year gave high profile confirmation that buying gap insurance from a motor dealer is normally much more expensive than buying from an independent insurance broker. Indeed we understand that one prestige manufacturer offered a three year return to invoice policy to a customer recently for £1000, however the customer found a similar policy online for less than £150.
Of course the question to motor dealers is Gap Insurance so expensive?
Well you may be offered many different reasons for this, and we have heard some amazing excuses including:
“Well our Gap is backed by the manufacturer” – Obviously the manufacturer may have their name on the document, bit Gap Insurance is like any other insurance is underwritten by an insurer. Gap policies bought online are just the same. The manufacturer involvement may be minimal to say the least.
“Our policies are just not the same as those bought online” – There may be some truth to this, as if you look at the policy features of online brands they tend to be far more comprehensive than a manufacturers policy. For example check carefully the terms for transfer (many manufacturer policies will not allow this, which goes against the ABI recommendations) and cancellation (do you get a pro rata refund if you cancel early?)
“What happens if the online broker goes bust?” – of course a natural concern in difficult financial climates, however how many motor dealers go bust too? The truth is that this should not be an issue as even a motor dealer who does a hand full of Gap policies each year will have a ‘risk transfer’ agreement in place with the insurance provider. This means the insurer puts you on cover as soon as you pay the dealer.
“You have to decide on Gap Insurance before you drive the vehicle away” – actually this may be true with a policy from a dealer and you have to consider how a motor dealer works. They are in business to sell cars, and are less likely to be inclined to follow up a possible Gap Insurance sale. Actually most Gap Insurance brands online allow you up to 180 days to take out a policy.
Buy Gap Insurance online and save?
It would seem that more and more UK consumers are checking out the facts themselves, and more and more are now realising that the premium prices offered by motor dealers may not be the most competitive in the shortfall market after all.