The Role of GAP Insurance in an Uncertain Market

The UK car market is facing real uncertainty in 2025. According to the Motor Ombudsman’s latest Franchise Dealer Workshop Survey, more customers are keeping their cars for longer and delaying or abandoning repairs due to rising costs.  In fact, 28% of workshops have seen customers abandon their cars on site when repairs are too costly or uneconomical.  

In today’s uncertain market, this is a growing problem for both customers and dealerships. 

For dealerships, this creates new risks, but also new opportunities to support customers with the right protection. Here’s why GAP insurance is more important than ever. 

• 68% of workshops reported that customers are holding on to their vehicles for longer, often to avoid the cost of upgrading or because of financial pressures. 
• Customers are putting off essential repairs (reported by 56% of workshops), and in some cases, abandoning vehicles entirely if the cost to repair is too high  

If a customer’s vehicle is written off in an accident or stolen, their standard insurance usually only pays out the current market value of the car. But with customers keeping their vehicles longer and used car values fluctuating, this payout is often much less than what the customer originally paid, or what they still owe on finance. 

Should a customer have delayed repairs or the car’s value decreased, they could face a large shortfall between the insurance payout and what they owe on finance or paid for the vehicle.  And for dealerships, abandoned vehicles and customer dissatisfaction can lead to lost business and damaged reputation. 

How GAP Insurance protects everyone 

GAP (Guaranteed Asset Protection) insurance bridges the gap between the insurance payout and the original invoice or outstanding finance. Here’s how it helps: 

1. Financial Peace of Mind for Customers 

If a car is written off or stolen, GAP insurance covers the difference, so customers aren’t left out of pocket, even if their car’s value has dropped or they’ve kept it longer than planned. 

2. Supports Dealership Reputation and Retention 

Offering GAP insurance shows customers you care about their financial well-being. This builds trust and loyalty, especially important as customer retention is a key positive for 70% of workshops. 

3. Protects Dealership Revenue 

GAP insurance can be an additional revenue stream for dealerships, helping to offset the challenges of rising operational costs and customers delaying maintenance. 

With more customers keeping cars longer and repair costs on the rise, GAP insurance is a must-have in today’s uncertain market. It protects both your customers and your dealership from unexpected financial loss, supports customer loyalty, and helps your business thrive, even when the market is unpredictable. 

With more customers unable to afford high repair bills and vehicles being written off or abandoned, GAP insurance is a crucial safety net. It protects your customers from unexpected financial loss and helps your dealership avoid the headaches of unclaimed or abandoned vehicles, even during times of uncertainty.  Offer your customers peace of mind and protect your dealership’s future with AutoProtect’s GAP insurance solutions.