Almost two years have passed since the Financial Conduct Authority (FCA) introduced new rules governing the way GAP insurance can be sold. These rules were designed to ensure customers had the opportunity to make more informed purchasing decisions and also to reduce the chances of mis-selling.
Among the changes were the introduction of prescribed pre-sales information and a two-day deferral period between when the information was first given to the customer and when the sale could be closed. But how have car retailers implemented these changes and what impact have they had on sales figures? We talked to David Teatum, Head of Finance Operations at Stoneacre Motor Group, to find out:
What impact have the changing regulations had on your business?
This has been very positive for our business. We deliver 75% of our cars within 48 hours so the new rules effectively stopped us discussing GAP at our branches. The result was we created an in-house GAP team at our Head Office Contact Centre in Thorne. When a car is delivered, the following day we email / post the customer the necessary Prescribed Information and, if they haven’t called us by the time the two clear days have passed, we call them. In the first 12 months of this process, we issued more than double the number of policies.
What were the main issues you faced?
Our Business Managers could no longer discuss GAP and this initially caused us some concern, until we decided to trial it by removing GAP from some branches to test the process. As the results were almost instantly better, we very quickly rolled the process out across the Group.
Have customers noticed the changes?
Customers do tend to read and understand the policy in more detail now it is a separate sale, rather than be mixed in with all the paperwork when collecting their vehicles.
How did you prepare your staff for the changing regulations?
Together with Car Care Plan, we devised a bespoke training plan which was delivered by both our in-house training team and Car Care Plan representatives. This was also followed up in the immediate period post-launch and support was easily available from Car Care Plan as and when required (which wasn’t that much due to the training!).
How have Car Care Plan supported you through regulation changes?
They have been invaluable. In the early days we had daily calls to discuss various scenarios that cropped up. The entire team were very supportive and helpful, which made the launch of this new process very smooth.