Car dealerships charge huge mark-ups on GAP insurance, Which? warns
Dealerships are charging up to four times more than insurers for GAP cover, new Which? research has revealed.
GAP (guaranteed asset protection) insurance is designed to cover the difference between the amount paid for the insured vehicle and the amount your motor insurer will pay after a write-off or theft.
With standard motor insurance policies often only covering for the current value of the vehicle, this type of specialist policy has saved many motorists on financing deals from being out of pocket when making a claim.
The consumer group looked at the cost of GAP insurance at Ford, Toyota, Lexus and Honda dealerships and seven insurers. Although it may be convenient to buy insurance at the dealership, the mark-up was as much as £367 at the Ford dealer and in all cases consumers could save at least 50% by going direct to an insurer.
“These quotes may not be representative of all dealerships connected to these brands, but it’s always worth comparing a dealership quote with quotes from insurers,” Which? recommended.
The research also showed that inflated prices were being charged for cosmetic scratch and dent insurance and alloy wheel and tyre insurance.
While dents and dings are covered by traditional comprehensive insurance, the excess charged — and the risk of losing your no-claims discount — can make it uneconomical to claim, so many people opt for these extra insurance products instead.
Which? compared the quotes from a Ford dealership with the average price charged by seven insurers.
For a Ford Fiesta, the dealership quoted £599 for cosmetic scratch and dent insurance but the average cost from insurers was £265 — a £334 saving.
Alloy wheel and tyre insurance for the same model would also cost £599 from the dealership, but an average of £441 from insurers — a saving of £158.
Get a quote for GAP insurance with the Insurance Factory and see how much you could save!