In keeping with our year on year growth and development plans, click2protect, the owner of car2cover.co.uk – has changed it’s legal status from a Partnership to a Limited Company with effect from 1st April 2015.
Click2protect launched on-line in February 2007 to offer customers an alternative source for higher quality and substantially lower cost Gap Insurance, Tyre Insurance, Scratch and Dent and Alloy Wheel insurance.
Since 2007 the business has been seen to be the market leader and most knowledgable in the market, having been chosen to consult with Defaqto and the FCA on the development of the Gap Insurance product and its marketplace.
The business ethos is simple. Highest quality products at the lowest prices in the market delivered with a level of sales and claims service that exceeds the expectations of its customers.
The new Limited company status brings about a name change to Click2protect UK Limited – and the company’s directly authorised FCA status remains unchanged.
Leading car insurance provider, Admiral Insurance recently published an on-line article in which they confirmed ‘modern car theft is on the rise‘
The article found here confirmed that thieves are using high tech gadgets that are easily obtainable to intercept signals from vehicle security systems.
This hi tech approach to car theft enables thieves to make off within 10 seconds and in London alone, almost half of the 21,000 vehicles stolen were taken using these advanced methods of theft.
The gadgets used is readily available locksmith equipment that enables instant access without a key.
With the Association of British Insurers confirming over 500,000 vehicles are written off every year (57 per hour – every hour), cars, motorcycles, vans and motorhomes represent a high value easy target for the thief. Most stolen vehicles are dismantled and their components sold globally to avoid detection.
The argument for some form of Gap Insurance is becoming increasingly compelling. In most cases Gap Insurance can be purchased for less than the cost of mobile phone insurance and can protect the policyholder against substantial financial losses if a write off by damage or theft occurs.
We hear these stories from our customers pretty much every day and we thought we would share this typical example with you to highlight how risky it can be to accept your dealers Gap Insurance.
A customer told us he was buying a new prestige car on a 4 year PCP (Personal Contract Plan) finance agreement. The ‘on the road’ price of his new car was £36,500.00 (after a special discount of £5,000) and at the end of the finance plan the finance company required a payment of £13,870.00 if he wanted to keep the car. This is the finance company’s forecast of the vehicles approximate value at the end of the 4 year period.
We did this simple calculation to calculate how much Gap Insurance cover the customer needed to consider;
Vehicle purchase price £36,500.00 minus the lenders forecast value at end of the finance agreement of £13,870.00 = potential depreciation of £22,630.00. Not a difficult calculation – just common sense.
This customers dealership advised that he should purchase a 3 year £15,000.00 level of cover ‘Return To Invoice’ Gap Insurance for £599.00.
The ONLY thing this dealership did right was to suggest Gap Insurance in the first place. What they did wrong was;
> They offered a 3 year period of cover when the customer intended to keep the car 4 years, leaving him unprotected in the 4th year,
> They offered a £15,000.00 maximum claim limit when the lender is forecasting £22,630.00 in depreciation,
> They offered a Return To Invoice Gap Insurance when the likelihood is the cost of a replacement in year 2, 3 and 4 will be substantially more than £36,500.00 due to price increases, model changes, reduced discounts etc.
> They tried to make a substantial profit out of this customer – possibly up to £450 profit!
Not only would the customer have been inadequately covered by an inappropriate policy for a year less than he needed it – he would have been spectacularly overcharged.
After talking through his requirements with us the customer purchased a ‘Vehicle Replacement‘ Gap Insurance from us for a 4 year period with no claim limit for just £299.00 – a 50% saving for a policy that will pay for a replacement even if the cost of a replacement is more than he originally paid (not limiting itself to the original invoice price like the dealers policy) and for a year longer.
That is why we suggest there are dangers and risks involved in buying Gap Insurance from your dealer. They are motor dealers, not specialist insurance brokers.
If you have a similar story, please let us know – we would love to hear from you.
Please feel free to call us on 01438 870615 or email us at email@example.com. We promise no sales techniques or pressure – just friendly explanations and prices.
For decades motor dealers have profited handsomely from the sale of Gap, Tyre, SMART (Scratch and Dent) and Alloy Wheel Insurance – and until now the consumers choice of product and supplier has been severely limited.
From 1st January 2014, car2cover.co.uk announced the launch of two new products to give consumers greater choice, quality and financial saving.
SMART Insurance, sometimes referred to as Scratch and Dent insurance is now exclusively available to our Gap Insurance policyholders. This protection provides up to £3,000.00 of small cosmetic repairs to your vehicle body work and repairs are carried out at your home or place of work and backed by a three year guarantee. Up to 2 claims per year can be made and 5 in the total period of insurance. Unlike some policies on the market, there is no limit to the cost of each claim, except of course the total claim limit of £3,000.00.
Alloy Wheel Insurance, is exclusively available to our Gap Insurance policyholders and is available in combination with our Tyre Insurance or SMART Insurance cover. This insurance will provide up to 2 claims per year and 5 in the total period of insurance and again repairs are carried out at the policyholders home or place of work and are also covered by a three year guarantee. Up to £100 is paid towards the cost of each repair. Diamond cut, chrome effect and split rim alloy wheels cannot be covered by this policy to to the specialist nature of repairs on these types.
These new products are designed to help owners protect their investment and now provide the consumer with choice and a significant price advantage.
Terms and Conditions and more information for both types of cover are available on our web site at www.car2cover.co.uk.
Call for more information or if you have questions on 01438 870615.
As the UK’s leading and longest continually FSA/FCA authorised Gap Insurance specialist, business has been growing year on year as a result of substantial numbers of new and repeat customers.
To cater for the increased levels of business we have relocated from Stevenage in Hertfordshire to Sawbridgeworth in Hertfordshire. Our new offices provide greater space for expansion whilst retaining easy access to M11, M25, A1 and M1 motorways.
The new home of Gap Insurance is the 3rd and 4th Floors of a sympathetically restored Maltings Building 150 yards from the Sawbridgeworth main line station.
Founded 8 years ago in Stevenage we have remained an integral part of the local business community since our formation and to retain our Stevenage identity and continuity, we will endeavour to retain our Stevenage telephone number prefix.
Our full address from 1st February 2014 is;
trading as car2cover.co.uk,
3rd and 4th Floors,
Sheering Lower Road,
Our telephone number remains 01438 870615 or 0843 2898318
As a result of ‘pressure’ to sell Gap Insurance and other insurance products, motor dealers often use a number of ‘tactical’ means to increase their policy sales to achieve the manufacturers insurance sales targets.
Why would a motor manufacturer set an ‘insurance sales’ target you may well ask ?
Motor manufacturers supplement their profits by setting up insurance schemes for the dealer network and are paid a commission for every policy sold by their dealer network. The income can be substantial. Take a franchise such as BMW for example. BMW have approximately 150 dealers in the UK and if every dealer sells 40 policies per month, that equates to 72,000 policy sales -and if their commission arrangement with the insurer is say, £15 per policy – that provides the manufacturer with over £1 million extra profit per year from one additional supplementary product offering. Ford and Vauxhall for example have double that number of dealers and therefore their revenue is also likely to be over £2 million pounds per year.
What does this mean to you as a consumer?
Profits of this proportion means manufacturers set some tough insurance sales targets and therefore there is a ‘pressure’ to sell applied to the dealers – and pressure to sell can lead to some poor practices that are not in the consumers interest or indeed fitting with the FCA principles.
One common tactic is to offer Free Gap Insurance when negotiating a sale with a buyer. What’s not to like about something that is free? Let’s be clear, the policy is not free to the dealer – they will have to pay the premium to the insurer on your behalf and it will be in forfeit of some of the discount that would have been available to you anyway. So, it’s not an act of kindness – it’s a means of selling an insurance you may not have otherwise purchased from them and it gives the perception of ‘good will’ to help ‘seal the deal’.
So, what is so wrong about free Gap Insurance?
Because so many parties receive a financial benefit when a policy is sold by a dealer, ie the manufacturer, the franchised dealer, the Sales Executive and the dealers Business Manager – the manufacturer will negotiate the lowest premium, regardless of quality of cover, to give the greatest opportunity for all parties to make a very healthy profit. Insurance is simple. An insurer can only reduce a premium when he is able to reduce the risk of a claim and reduce the payment in a claim – and this is achieved by setting what are known as ‘Limitations and Exclusions’ within the Terms and Conditions. Because this ‘free’ gift is coming to you at a cost to your dealer, they may choose an insufficient level or type of cover – simply to keep their costs down.
Therefore your ‘free’ dealer Gap Insurance policy could lead to disappointment and unexpected loss when you make a claim, making your ‘free’ Gap Insurance far less appealing than it was when it was ‘gifted’ to you.
Dealer policy’s are often very restrictive, lacking in choice and flexibility and normally negotiated by someone with very little or no knowledge about Gap Insurance. Before you accept a free Gap Insurance – invest 5 minutes of your time to talk to a Gap Insurance specialist – it could save you a great deal of money.
To speak to one of the most experienced Gap Insurance specialists in the UK without any sales pressure or obligation – call 01438 870615.
With an increasing number of employers offering employees a company car or car allowance choice – the personal tax position can be a little confusing.
Simply put, if an employer provides a company car and the employee has personal use – regardless of how little, the employee must pay tax on that benefit. Likewise, if an employer provides fuel and the employee uses that fuel for personal use – regardless of how little, the employee must also pay tax on that benefit. Where fuel is not provided but a mileage allowance is paid for business mileage, there may be a tax allowance or charge depending on the circumstances.
Company Car Tax
If an employee has personal use of a company car, HMRC consider that to be a Benefit In Kind and as such apply a tax charge to that benefit.
The Benefit In Kind for company cars is based on the carbon dioxide emissions and a HMRC adjusted list price of the car referred to as P11d value. Different rules apply according to the fuel type and the tax charge can change from time to time.
To calculate how much tax will be charged for a particular car, the employee will need to establish two things;
1. P11d value of the vehicle. This is the recommended full retail price including vat and delivery charges, plus any optional extras with a value over £100 each. For the purposes of establishing a P11d, HMRC exclude the cost of vehicle excise duty (road tax) and first registration fees. The P11d value can be reduced if the employee has opted to personally pay for optional extras and in these cases HMRC would require evidence of such payments.
2. The vehicle’s Benefit In Kind % rate. The Benefit In Kind % rate is dictated by the carbon dioxide emissions of the vehicle – usually expressed in manufacturers marketing materials of vehicle registration documents as grammes per kilometre (g/km). When the emissions figure is established, the Benefit In Kind % rate can be found on this HMRC company car tax table http://www.hmrc.gov.uk/statistics/tax-benefits/tc2b.pdf.
With these two items of information the employee can calculate how much tax will be charged by multiplying the P11d value by the Benefit In Kind % rate. For example if a vehicle has a P11d value of £20,000.00 and a Benefit In Kind % rate of 20%, the calculation would be £20,000.00 x 20% = £4,000.00 of taxable benefit. If the is a diesel powered a 3% additional supplement is added (until end of 2016/2017 tax year, at which point the supplement will be scrapped) and therefore the Benefit In Kind % rate increases to 23% in the example above.
Rules for the various types of fuel are; Petrol engines = standard Benefit In Kind % rate, Diesel engines = standard Benefit In Kind % rate plus 3% supplement, Petrol/Electric hybrid engines = standard Benefit In Kind % rate, Diesel/Electric hybrid engines = standard Benefit In Kind % rate, All electric = zero rated until end of 2014/2015 tax year when a 5% – rising to 7% charge will apply.
How can an employee reduce the tax charge on a company car?
By choosing a lower priced vehicle with lower CO2 emissions.
How can an employee avoid company car tax?
By choosing an all electric powered car or by parking the vehicle at his/her employers business premises at weekends and evenings to ensure no personal use whatsoever. Do bear in mind electric powered vehicles are zero rated only until 2015 when a small charge will then apply.
Fuel Benefit Charge
Employees who receive use of employer paid fuel will be charged tax on that benefit regardless of the level of use or mileage. HMRC use what they call a Car Fuel Benefit Charge Multiplier and the multiplier normally increases every year. In the tax year 2014/2015 the multiplier will be £21,700.00. Therefore if a vehicle has a Benefit In Kind % rate of 20%, the calculation of fuel benefit will be £21,700.00 x 20% = £4340.00
Mileage Allowance Payments
Some employers choose to pay a mileage allowance rather than provide fuel – and some give the employee the choice. HMRC have an Approved Mileage Allowance Payment (AMAP) – a tax free figure which is currently 45p per mile for the first 10,000 miles and 25p for every mile thereafter. However, employers may pay something different – perhaps 30p per mile. Where the total received from the employer is less than the total allowed tax free (AMAP), the employee can claim that difference as a tax allowance. If the amount received by the employer exceeds the tax free (AMAP), the employee will be charged tax on that excess benefit. As an example, lets assume an employer is paying an employee 35p per mile and the employee claims 15,000 business miles, the amount the employee would have received is £5,250.00. This figure is then compared with the Approved Mileage Allowance Payment (AMAP) figure which would be; 10,000 miles @ 45p = £4,500.00 and 5,000 miles at 25p = £1,250.00 total £5,750.00. In this example the employee can claim tax allowance on the difference between what was paid ie £5,250.00 and what could have been paid tax free of £5,750.00.
Company Car or Car Allowance ?
Some employees are offered a choice of a company car or a car allowance. The information above should help you calculate the tax you will pay if you choose a company car and help you consider the impact of employer paid fuel or employer paid business mileage allowance. If you are considering a car allowance – do so with care and full consideration of all the possible expenses and financial risks. A car allowance is a taxable benefit. If you are considering a car allowance and will use it to finance a car – do bear in mind the finance agreement will be remain your liability in cases of redundancy, accident illness or voluntarily changing employment or employment circumstances. When considering a car allowance always budget for expenses for ‘will occur’ and perhaps budget for those that ‘might occur’
Expenses that will occur
Expenses that might occur
The FCA have recently imposed their highest fine since their transition from the FSA.
Lloyds Banking Group which includes brands such as Halifax and Bank of Scotland were issued a £28m fine for adopting staff incentive schemes which include bonuses for achievers and demotion for non achievers.
The FCA reviewed the firms ‘incentive schemes’ and found them to be structured in a way that ‘encouraged’ staff to hit targets rather than treat customers fairly in the sale of a number of insurance and investment products.
The FCA’s considered the firms incentive schemes to be encouraging advisors to increase their salaries and bonuses, by selling products to customers that they did not need or want.
The fine was increased by 10% when the FCA considered that the FSA had previously fined Lloyds TSB in 2003 for a similar activity.
November used car values increased by 4.3% which according to BCA (British Car Auctions) is the highest monthly increase since their monitoring started in 2005.
Year on year figures show prices up by 16% when compared to the same period in 2012.
When considered from a Gap Insurance perspective, these figures suggest that a Vehicle Replacement Gap Insurance policy would have to pay £2,400.00 more to replace a used car originally costing £15,000.00.
It also suggests that potential buyers of dealership Gap Insurance, which is most often a Return To Invoice Gap Insurance cover – would still require the buyer to find that extra £2,400.00 to purchase an equivalent car in the event of a write off.
We encourage potential buyers of Gap Insurance to fully consider the impact and costs associated with a write off and choose cover that meets their demands and needs.
For more information – contact us – we are here to help.
According to industry experts ASE (Automotive Services Europe), up to 25% of Septembers new car registrations were pre registered cars and not genuine retail sales registrations.
If those statistics are correct over 100,000 of the 403,136 new car registrations were registered by dealers – to themselves, to achieve lucrative manufacturer sales bonuses.
Dealers are expecting to be ‘pro-actively’ retailing those 100,000 pre-registered cars at substantially discounted prices and customers taking advantage of these these deals are already considering and purchasing Vehicle Replacement Gap Insurance as an important protection.
In the event of a write off, customers are unlikely to be able to secure the same deal again to replace the car with a like for like – particularly from the 2nd year of ownership and longer.
A car with a normal retail price today of say £18,000.00 may be discounted down to £14,000.00 in its pre-registered form. If a write off occurs in three years time, the cost of an equivalent replacement could be £20,000.00 – when price increases and model facelift costs are factored in.
Without a Vehicle Replacement Gap insurance in place, the owner may need to dig very deep to find the difference between the motor insurers write of settlement and the cost of an equivalent replacement.
Food for thought.
"Thank you for giving me a replacement gap cover insurance for my new car free of charge. After the hassle of having my car written off, this is a nice little bonus. Also the experience of claiming from your company was very pleasing and hassle free" Mr D Day, Kent, February 2016