What's Happening to Gap Insurance & how Dash Cams can help

What's Happening to Gap Insurance & how Dash Cams can help

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A GAP in the market: Why car dealers are looking at dash cams as a new way to offer drivers protection and value

So, Car dealerships are considering new ways to offer UK drivers protection and peace of mind after new Gap insurance sales were put on hold last week.

The move means that car owners are vulnerable to being left out of pocket in the event of an accident and dealers are also set to suffer financial losses.

With motorists increasingly turning to dash cams to help settle insurance claims quickly and fairly, dealers are considering including the devices alongside car sales as a way to help protect the value of customer vehicles from the moment they drive off the forecourt.

Adding dash cams to their suite of available extras can give dealers a popular new way to provide value to their customers while also incentivising employees.

A new challenge for car dealerships

The news that the FCA had written to insurers amid concerns with the design of Gap Insurance across all distribution channels has left dealers unable to provide the insurance alongside new car sales.

Gap insurance covers the difference between the drop in value of their car since it was purchased, and the amount insurers will typically pay out in the event of a ‘total loss’ claim.

Worryingly, it isn’t clear at this stage when and in what form car dealers will again be able to provide the additional level of insurance to customers.

As the cost-of-living crisis continues to bite, both motorists and dealers are seeking new ways to protect and increase value where possible.

And the news that Gap insurance sales would need to be suspended has only served to speed up that process with dash cams now being considered as a key solution, offering a win-win for both the motorist and dealership. 

Giving new car buyers the protection they desire

Many motorists rely on getting Gap insurance cover from dealers at the same time the vehicle is purchased as they understand the value of their new asset and are keen to protect that value as best they can.

Like Gap insurance, dash cams are seen by consumers and the industry as an effective way to protect the value of a vehicle while also offering additional benefits to drivers.

Owning a dash cam can lower your car insurance premium by as much as 20% from the outset and protect no claims bonuses into the future.

But most importantly, they provide drivers with the evidence they need to win a claim and protect against fraud.

It is this level of security and value that is responsible for increasing dash cam ownership in the UK and dealers are recognising that providing this level of protection at the point of sale makes sense for both the motorist and their business.

A market with huge potential

There is significant growth potential for the dash cam market with only 18% of UK vehicles estimated to be currently fitted with a dash cam.

And a study conducted by a well-known insurance company last year found that 82% of those without a dash cam would change their minds if they knew it would lower their car insurance.

Dealerships seeking to significantly increase their profits are seeing this huge growth potential as a sizeable opportunity.

With the future of Gap Insurance in doubt, no other product offers motorists the same level of immediate value in terms of protection and reduced insurance costs as dash cams, while providing dealers the opportunity to tap into a safe, profitable and growing market.

At the moment of purchase of a shiny new vehicle what drivers really want to protect is the value of their asset.

Gap Insurance has served this purpose in the past, but savvy car dealerships are coming to realise that there are new, better ways to offer drivers value, incentivise staff and increase profits – and this is in the shape of dash cams. 

Mind the Gap

Are you a car dealership that is looking at new ways to increase profits and overcome the gap left by Gap Insurance? Then let’s talk dash cams and road safety.

Message me on LinkedIn or email me at gary.digva@ipiltd.net

I’d love to hear from you.

Thanks for reading!