Dealers who sell insurance such as Gap Insurance and Payment Protection Insurance (PPI) have to be authorised and regulated by the Financial Services Authority in the UK even though the selling of insurance is only incidental to their main business of selling cars. FSA regulation comes with many strings including the need to monitor sales of insurance and to ensure that no policy is mis-sold.

We all know that dealers can earn significant commissions from these unexpected extras and any unwary new car buyer may be trapped into agreeing to take out insurance cover when it is not appropriate. The FSA says that this is against their rules and must stop.

A Midlands dealership has been given a public rebuke by the FSA for mis-selling PPI insurance. The company stands accused of not providing buyers with adequate information on which to base a decision about whether to obtain the insurance or whether to shop around for it.

The FSA says that it has a number of other dealers in their sights against whom action is about to be taken.

Lesson - do not unquestioningly accept what the dealer tells you when it comes to extras such as PPI and Gap Insurance. Ask yourself whether you do need the cover and take the time to check for alternative packages e.g. via the links on this web site. Click below for a free quote.

Gap Insurance