Press report: car salespeople use FSA regulation to 'flog car cover'
A report in the Guardian's Money supplement of 10 March said several car buyers had reported commission-hungry car salesmen making them sit through sales pitches for gap insurance by falsely claiming that Financial Services Authority rules require it.
Gap insurance covers the difference between an insurance company's offer if a car is written off or irrecoverably stolen, and the money still owed on a hire-purchase agreement. The Guardian report says such insurance from a car dealer costs £300-400, but half that amount if bought elsewhere; a web-based supplier called Clik4gap quotes £152 to cover a £10,000 car for three years.
The report said three buyers from a Honda dealership had complained of such pressure to buy gap insurance, but added that it was not uncommon elsewhere.
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