Why are dealership prices so different?

My dealership said “There must be something wrong with your policies with prices different?”


There are three very easy reasons why your dealership will have quited you such a different price none of which have anything to do with the levels of service, support, back up or quality of insurance.

1st reason. When you buy a gap insurance policy directly from the dealership you have bought your vehicle from they are legally bound to charge you IPT at 20%. The government say that because they have had the benefit of the sale of your vehicle they must charge you at this rate and is totally beyond their control and is not their fault. IPT ( insurance premium tax) is charged at a much lower rate when you buy independently online this means that they can pass savings on to you.

2nd reason- economies of sale. Your local dealership lets say is a medium to large will sell on average 1000 vehicles per year. The average dealership will provide a gap  insurance policy to one in three people. This means that they will sell a total of 333 policies per year.  The top ten gap insurance providers on line will provide this many policies in a matter of days. This means that there supplier price is much lower and that they can pass savings on to you.

3rd reason – costs and commissions. Your local dealership has a lot of costs. Lots of costs. From technicians to gardeners, from sales executives to dealer principles they all have to paid for. Most on-line companies even very very big ones can trade from more modest offices. As they are not paying commissions again they can pass savings on to you.

Why are Dealership Gap Insurance Prices so Different?
Why are Dealership Gap Insurance Prices so Different?

So by buying from an independant online provider you can save on the cost of your gap insurance without any compromise on cover, service, back up or quaility of insurance.

So why not get a quote, and make your own informed choice as to where you buy your gap insurance from.

There may only be three reasons why your dealership insurance is priced so differently but put them all together and it means that you can save up to 85 % buying online.