TCF and the Role of Added Value Products

As dealers move to develop the customer-centred culture required by the FCA, AutoProtect is encouraging dealers to take a positive approach to exercising a duty of care.

“It can be all too easy for dealers to overlook the value that is embedded into added value products, such as MBI and RTI insurances,” notes Mike Macaulay AutoProtect's - Head of Corporate Sales. He adds, “We risk overlooking that many customers are financially stretched, or on seeing it, make assumptions that add on insurance products will not be affordable or required. Fairly priced, high quality insurances offered on a standalone basis, or in the case of an extended MBI situation, to add value to a used car, can help build a level of customer confidence that creates a sale.”  

Research by the Money Advice Service in 2014 and referenced in the FCA’s recently published Consumer Vulnerability Occasional Paper, point out that whilst some of us have amassed some savings, only 58 per cent could cover a £300 unexpected bill. The remaining 42 per cent would have to think about how to pay for it.

A significant number of the UK population simply does not have the resilience to weather financial shocks. In fact, the research concludes that two thirds of people who fall into serious debt problems do so because of some form of income shock. If this was an unexpected car repair or a problem following a vehicle write-off, the right insurance product could have helped avoid this ‘income shock’. The consumer and the dealer’s reputation would both benefit.

“This is not about pushing insurance products. It is about ensuring that as part of TCF customers are made aware of additional services that might benefit them and enabling them to make an informed decision to buy them or not,” concludes Macaulay.