Motor dealers are looking to Gap Insurance to provide higher profits for vehicle sales, so say a leading motor trade website. The Motortrader has released a report that says dealers are now concentrating on the sale of Gap Insurance as consumers become more aware of the benefits.
Gap Insurance on the rise
It is reported that sales of Gap Insurance first began to rise in 2009, when a sharp decrease in vehicle values saw consumers look to protect themselves with Gap cover. In 2013 we have seen a remarkable rise in new car sales, but consumers seem to be more aware of how they can protect their financial investment with Gap cover.
Of course with margins squeezed on the profit potential of vehicles themselves, and strong competition with direct lenders for the finance element of vehicle sales, perhaps it is not surprising that motor dealers look to ‘add on’ products like Gap Insurance, Tyre Insurance and SMART dent and scratch cover. With an increase in consumer awareness through the motor dealer attentions, the sales of these products offer an attractive profit centre for dealers.
If a motor dealer can make £200 profit from a Gap Insurance sale, then even a slight increase in product sales can have quite an effect on the profitability of the dealer.
Not just increase Gap Insurance sales at motor dealers
However, of course your motor dealer is not the only place where you can buy Gap Insurance, and indeed some of the leading independent Gap Insurance providers are reporting huge increases in product sales. One of the biggest names, GapInsurance123 has reported a record month for the brand in March 2013, with an increase of 233% when compared to March 2013.
There is little doubt that the sales of Gap Insurance products look set to increase over the next few years. What remains to be seen will be just where the consumer opts to buy their cover from, the traditionally expensive route of the motor dealer or the burgeoning market of the independent Gap Insurance brands.