Will Gap go away?!!?

New Regulator Addresses Gap in the Market

For dealers offering vehicle finance, 2014 has already proved to be a period of transition due to the change in industry regulator to the Financial Conduct Authority. The FCA’s focus is on consumer protection and transparency.

As well as amending the ways dealers must offer vehicle finance, the FCA has raised the area of guaranteed asset protection (GAP) insurance as part of its first market study. The regulator found that consumers had a poor understanding of GAP policies and product coverage, and didn’t receive value for money, partly because of a lack of competition.

The FCA is therefore proposing a major change to the selling model. The change would mean that the sale of GAP insurance cannot be concluded at point of sale of the vehicle, but only at a later point, and that the consumer must be given information about alternatives if the product is offered at point of sale. There are also plans that would require dealers to publish claims ratios to highlight product value.

―Courtesy Motor Finance

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Student Loan Debt Could Impact Auto Loan Debt Growth

June 25, 2014 by Cody Lyon

Kroll Bond Ratings said that growth in the student loan debt market could have future negative impacts on the growth of mortgage debt and auto loan debt. The information came in Kroll’s first quarter 2014 US Consumer Credit Update. Student loans are the largest component of non-mortgage and home equity debt, at $1.111 trillion. uto loans represent the second largest segment of non-mortgage and home equity consumer debt balances, the report says. Both auto and student loan debt have increased over the past few years, after declining during the recession. Today, auto loan debt balances are the highest they have been in the last ten years. Over the past quarter, student loan debt increased by $31 billion and auto loan debt was up by $12 billion.

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