The Rules as of September 1st 2015
Firms distributing GAP insurance in connection with the sale of Motor Vehicles (add-on-GAP) will be required to:
- Implement a mandatory deferral period for the product being presented & sold on the same day.
- Provide customers with prescribed information.
The FCA expect
to see better customer outcomes from more informed purchasing decisions and improved competition between add-on and standalone distribution channels as a result of these measures
What these Rules mean to you a Motor Dealer
- You are not able to sell or take an order for GAP Insurance on the same day as the vehicle purchase.
- You must provide customers with prescribed information to help them shop around and be more engaged when making decisions about purchasing the product.
- There is a mandatory 4 Day deferred period for the customer to research the product once the product has been introduced and prescribed information given.
- A confident customer however can instigate a purchase on the following day “Sunset Clause” which means 1 day after the order form.
- On the following day the customer can solicit back to the dealer that he or she is a confident, well informed customer and have elected to go ahead. Waving their 4 day rights.
- If the customer does not elect to waive their rights and has not indicated they are a confident customer, you must wait a minimum of 4 days to resolicit a GAP Purchase.
What is prescribed information?
The total premium of the add-on GAP insurance policy, separately from other prices
The significant features and benefits, significant and unusual exclusions or limitations and cross-references to the relevant policy document provisions.
That GAP insurance is sold by other distributors.
The duration of the GAP insurance policy.
Whether the GAP insurance policy is optional.
When the GAP insurance contract can be concluded by the dealer, including the date on which the information was provided so it is clear to the customer when the ‘clock’ has started.
Automotive Compliance have all the process and procedures a Motor Dealer requires