Car Dealerships Overcharging For Insurance Cover
New findings reported by consumer body Which have revealed that car dealerships are overcharging motorists by up to 278% more than insurers when it comes to the price of add-on products.
Additional covers such as scratch cover, tyre damage or gap insurance are being sold at an exorbitantly high rate by dealers when selling a new car due to the substantial commission rates that come with them.
Four car dealerships were examined selling Ford, Lexus, Toyota and Honda vehicles, with premiums compared with independent online insurers. Alarmingly, gap insurance was being sold for up to £367 above the price that independent insurers were offering, with the majority of that cost going straight to the dealership as opposed to covering any of the insurance cover itself.
Which? also discovered that cosmetic and dent insurance was almost 60% cheaper to purchase directly, with wheel and tyre insurance up to 26% cheaper.
“We’re really concerned that car dealers are continuing to pocket huge commission fees from selling insurance products at rip-off prices, despite recent scrutiny from the financial regulator,” noted Which’s money editor Jenny Ross.
“The FCA needs to keep a close eye on these practices and be ready to step in with strong action if consumers face mis-selling or unreasonable charges for these products.”
This clearly calls into question the legitimacy of purchasing insurance cover directly from dealerships when purchasing a new car, and we would advise anyone in a similar position to contact us directly to talk about insuring your vehicle to avoid being unnecessarily overcharged.
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