As the UK starts to climb out of recession, the time has never been more important to consider Fleet GAP. Guaranteed Asset Protection or GAP as we refer to it, offers protection to customers against a financial shortfall in the event of their vehicle being written off.

Fleet GAP is designed to cover fleets from three vehicles upwards and includes cars, vans, commercial vehicles and HGV's. In the event of a total loss we will pay the difference between the motor insurer's market value and the greater of the outstanding finance or 25% of the insurer's settlement. It is an ideal product irrespective if there is a finance provider involved.

So why is now such an important time to be thinking about Fleet GAP?

Following the FCA's Thematic review into the sale of 'Add on' products, motor dealers are now required to provide a "Deferred Opt In period", four days between the introduction of GAP and conclusion on the sale of GAP. They are also required to notify their customer that GAP is an insurance product that is available to purchase elsewhere. The FCA wants to see more competition in the GAP Insurance market and insurance brokers have an ideal opportunity to promote these products to their customers. The FCA has confirmed that GAP insurance when not sold with the motor vehicle is not an 'add on' product.

The UK car market is still seeing record new vehicle registrations, with the Society of Motor Manufacturers and Traders (SMMT) reporting a 42nd consecutive month of growth in August 2015. The negative of such positive growth is the number of second hand vehicles hitting the sales forecourts. This increase in supply has been responsible for driving forecourt prices down on second hand vehicles and decreasing the market value, the same market value figures that insurers use for valuing total loss settlements. Coupled with rising repair costs, this means more vehicles are being written off than ever before and lower market values making an increased shortfall between the insurer's market value and the settlement of financial deals ever likely.

When considering GAP as a product for Fleet customers, it is important to remember commercial clients on Lease Contracts are not afforded the same regulatory protection as those in the retail lease market, which now falls under the watchful eye of the FCA. Commercial Lease contracts are unregulated and have no requirement to detail the early termination fees. As such, this could be the whole contract term plus fees - leaving a nasty shock in the event of a total loss, aided only by an effective Fleet Lease GAP product having been sold.

The commercial sector is often overlooked as an opportunity to distribute GAP Insurance. The perception is that businesses reserve for such events in their Profit and Loss. However the reality is somewhat different due to the competitive nature of the fleet sales market. If you look carefully at how fleets are funded you will see GAP is likely to exist, be substantial and historically overlooked.

Top up Fleet GAP offers an excellent solution for your fleet customers, a flexible product that is annually renewable, with up to 40% commission. We also have a Fleet Price Indicator available via our online broker facility.

Ensure your customers do not fall victims of the fragile second hand car market, which following a total loss can result in a financial short fall.

Offer Top Up Fleet GAP and take the hassle out of their Fleet Costs. Contact us for further details...