Dealer rip-offs on insurance policies
Car dealers are facing hard times, as the new car market continues to decline. Yet, the sale of add-ons, such insurance policies, have been valuable profit generators for retailers for many years – and not just those in the motor trade.
According to Insurethegap, itself a supplier of GAP insurance, which covers the difference between the car’s market value and its cost, car dealerships have been charging up to ten times more for such a policy, compared to an independent insurance broker.
Insurethegap’s research found that a £1,000 Mercedes main dealer quotation could have been provided for £109 independently. Another example saw the owner of a Volkswagen Polo being quoted £432, when an independent rate could be sought for under £100.
Why GAP insurance is useful
With more buyers financing their cars on credit, there is a risk of falling into negative equity, should the car be written-off, and the sum paid by a standard motor insurance policy may not cover the remaining finance payments. This leaves the policy holder facing a situation, where money is still due on a car that does not exist any longer.
Should you choose to take out GAP insurance, treat it like every other insurance policy – shop around for the best price and ensure that any policy meets your needs.