Since January 5, this year companies selling insurance products such as GAP insurance, vehicle replacement insurance, early termination insurance, vehicle warranties and similar motor insurance products need accreditation from the FSA to be able to legally continue selling them.
As long as funding providers have this accreditation then products such as GAP insurance and credit protection will be offered alongside the more standard motor insurance products.
Andrew Cope, chief executive at Zenith, said: ‘Funding companies can provide certain types of insurance products and advice, namely, GAP insurance and early termination insurance, also providing advice on what constitutes a good deal from an insurance perspective or handling claims including uninsured loss recovery.’
However, fleets should be demanding more in terms of the type of insurance product being touted by funding providers, according to Neil Davies. He believes that tailored packages, which fit individual fleet needs, are more suitable than a generic product to fit everyone. He said: ‘Many insurance products sold by fleet suppliers are off-the-shelf. To add value to customers, fleet suppliers should offer more flexible products that are tailored to customer needs as companies often face very different risks or have different attitudes to risk.’
Some funding companies already tailor individual packages depending on fleet needs. These can cover basic administration to arranging payment of fines. By taking advantage of such services, fleets can reduce their own administrative burden and even save costs.
Andrew Dawson, service development manager at Interleasing, said: ‘Funding companies can help with congestion charging, fine administration and dispute handling – the increasing number of fines and any disputes from drivers is an administrative burden for many fleet managers and this is a service that funding suppliers can provide for them. They can also offer integrated packages, including interim solutions like short term hire and minilease, to keep drivers on the road, even in the event of unforeseen circumstances.’
In such a competitive market fleets should be able to demand a variety of additional services. However, it is also vital that service quality does not drop just because funding providers have to do more than provide funds.
Customer service levels should always be high and if problems do arise then switching funding provider is not as difficult as it sounds. Richard Schooling, commercial director of Alphabet, added: ‘What is critical is the contract hire company’s own attitude when it comes to service quality. They outsource the on-the-ground delivery of the extra services, so it’s vital that they choose suppliers with care and take full ownership of what is delivered in their name.’