FCA regulations prove a boost for GAP
A year after their introduction, rules on the sale of GAP have boosted product sales and focused consumer minds on quality and not price.
This is according to Car Care Plan, one of the sponsors of the F&I Theatre which forms part of the new Automotive Management Live event.
Alan Lewis, national dealer development manager will take to the F&I stage to discuss the impact of the GAP regulations which were introduced in September last year through the Financial Conduct Authority (FCA).
Lewis said: “When the regulations were first introduced, they did create a degree of uncertainty and we will be taking a closer look at how they have been interpreted and how the regulations have impacted the sales process.
“At the time, we put together a host of materials to help dealers adjust to the new regulations and provide an understanding of what we thought the FCA expected of them, but looking back a year on when theories have been in practice and processes are embedded means we can assess them with fresh eyes and with the benefit of experience.
“It takes a while for the longer term impact to manifest itself and as an industry we are all still adjusting.
“Interestingly, by having a process which all employees have to follow, it has meant all customers now receive the same GAP experience ensuring the product is considered by all car buyers which in turn has boosted sales.
Increased GAP sales
"Sales of our GAP product have increased by over 7% in the past year since the regulations came into force.
“With some vehicles delivered ahead of the four-day deferral coming to an end, other methods of introducing GAP have had to be initiated, such as starting the clock ticking earlier or by utilising our outbound capabilities to create a more efficient and slicker sales process.
“One of the major changes we have experienced is the comparison with online providers which has created a massive opportunity to showcase the quality of dealer products because the consumer looks at them side by side.
"It is very obvious that cheaper products often don’t compare especially now Defaqto ratings [which award up to five stars for financial products] are being used and consumers can easily see a five-star product compared to another which scores below. The shift in focus by the consumer from price to quality has become very apparent.”
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