Complaints Culture Is Sales Culture: What a Dealership’s Complaint Handling Reveals About Its GAP Insurance Selling

There’s a simple way to assess how seriously a business takes customers. Don’t start with the glossy brochures, start with the complaints.

In motor retail, complaints and compliance shouldn’t be a back-office inconvenience. Complaints are the clearest window into the underlying sales culture. And when that culture is “deny, ignore, delay”, it rarely stops at complaint handling. It almost always begins much earlier, at the point of sale where add-on products like GAP insurance can be sold for profit over suitability.

This post uses a real-world pattern that we see repeatedly across the sector, illustrated through one case file involving a UK motor dealership (in this instance, Cotswold Motor Group). The facts described below are drawn from documentation eventually disclosed under UK GDPR and from the complaint record itself. The complaint has been escalated to the Financial Ombudsman Service FOS).

If you think the lessons of PPI have been heard, you may want to read on.

A complaint that was met with silence

In this case, we raised a GAP mis-selling complaint on behalf of our client.

What happened next is the part that tells you everything about culture that is replicated across the overwhelming majority of the sector, from dealerships to lenders.

Instead of engaging with the substance of the complaint, setting out a position, providing evidence, showing what advice was given and what checks were made, the dealership’s approach was, in essence:

• no acknowledgement, and
• no response, and
• no evidence produced to support its position.

When a firm cannot (or will not) evidence what happened at the point of sale, the consumer is left with only one realistic route. The roulette of escalating the complaint to FOS, where the test should become painfully simple:

If you can’t evidence suitability and fair disclosure, you don’t get the benefit of the doubt.

And then came the next chapter, one that dealerships increasingly dislike and attempt to avoid.

UK GDPR disclosures: the documents the dealership didn’t volunteer

Alongside the complaint we pursued a UK GDPR data subject access request to obtain the personal data and associated records held about the sale.

The documentation disclosed (after much resistance, delay, and the inevitable pressure that follows) was revealing. Not because it contained anything exotic, but because it showed what was always likely to be true:

Commission: the dealership received over 50% of the our client’s GAP payment

The disclosed paperwork shows that the dealership received more than half of the money paid for the GAP policy as commission (or equivalent remuneration) for selling the product.

That is not a minor incentive, it is the sales driver.

It must also be pointed out that the dealership would almost definitely not be the only party in the chain to receive remuneration. It is almost always the case that there are multiple parties involved in GAP, from the underwriter to any one or more of the administrator, distributor, seller and lender. On a conservative reading, that pushes the total “take” across the chain towards a level that consumers would reasonably consider eye-watering.

If you’re wondering why this feels like PPI, it is because it is PPI in all but name.

Re-educating FOS on GAP: “Demands & Needs” Isn’t Optional

There’s a moment in far too many of our GAP insurance cases where the conversation stops being about the consumer’s complaint and starts becoming a tutorial.

Not for the dealership. For the Financial Ombudsman Service (FOS).

We find ourselves having to explain and again that a dealership selling an insurance add-on is not just “retail staff offering a product”. The dealership is acting as an insurance intermediary and it has duties that come with that. In particular, it must carry out an adequate and evidenced demands and needs assessment to confirm the policy was suitable for this customer, this vehicle, and this situation.

History proves that consumers cannot rely on fair treatment of their complaints by lenders and dealerships.

And yet, in case after case, we’re watching FOS investigations drift into a familiar pattern of suggesting that the customer “chose” the product, the paperwork exists, therefore the sale must be fine. It’s déjà vu. This is PPI, but with a different badge on the forecourt.

The “new for old” reality: when GAP becomes redundant on day one

Let’s start with the practical issue that keeps getting missed by the inadequate initial investigation by FOS.

An overwhelming majority of new vehicles insured on fully comprehensive motor insurance are covered by “new for old” replacement in the first 12 months (sometimes longer, depending on insurer and policy terms). Put simply, if there is an accepted total loss claim against the policy the insurer replaces the vehicle with a brand new like-for-like equivalent rather than paying a depreciated cash value.

If that cover is in place, the central sales pitch that “your motor insurer won’t cover the full replacement cost” is demonstrably false. In plain English, the GAP policy is unsuitable on day one, and for a significant period of the period it is designed to cover.

We see this repeatedly:

• A customer buys a new car.
• The dealership sells GAP at the point of sale, often alongside finance.
• The lender and/or dealership insists on the customer having fully comprehensive cover (and often requests evidence of cover).
• The dealership chooses not to check whether “new for old” applies, for how long, or under what conditions.
• The customer later discovers the GAP policy would not have added meaningful value during the first year.

That’s not a technicality. That’s a clear suitability issue.

“Demands & needs” isn’t a tick box exercise

When a dealership sells insurance, the obligation isn’t “make sure the form is signed”. The obligation is to take reasonable steps to ensure the policy is consistent with the customer’s demands and needs, and to provide a statement reflecting that.

A proper demands & needs process, in the context of a new vehicle and a GAP add-on, should include questions like:

• Do you have fully comprehensive cover arranged?
• Does your policy include “new for old” replacement? If so, for how long?
• What’s your likely annual mileage and usage? (Some “new for old” terms vary.)
• Is the vehicle financed? If yes, what are the settlement terms and deposit/negative equity position?
• Does the term of the GAP product match the term of the finance agreement?
• What type of GAP is being sold (RTI, VRI, finance GAP, return to invoice etc.), and what gap is it meant to fill in this customer’s situation?

In most dealership files, the pre-ticked “assessment” is essentially:

• “Customer wants peace of mind.”
• “Customer chose GAP.”
• “Customer signed.”

That’s not a demands & needs assessment. It’s a sales narrative.

The uncomfortable parallel with PPI

The PPI scandal wasn’t only about one product. It was about a system and culture:

• Add-ons sold at the moment of purchase – incentivised by commission (just as GAP is)
• Pressure, bundling, and “it’s part of the deal”
• Weak checks on suitability
• Generic “needs” statements that could apply to anyone
• Paperwork used as a shield instead of evidence of compliance

GAP sold at dealerships often follows the exact same behavioural script. It’s offered at the emotional peak of the buying journey when the customer is committed, financially stretched, and primed to protect the purchase. The pitch is simple.

And when complaints arise, the defence is also familiar; “they agreed”, “they signed”, “they could have read it”.

That’s exactly why demands & needs matter. It is the guardrail that stops the add-on machine from running on autopilot.

Why we’re “re-educating” FOS (and why that should worry everyone)

Let’s first be clear, we are the pioneers in GAP mis-selling claims and FOS is learning (slowly), but it only currently has one investigator looking into GAP complaints and he hasn’t got the required experience or understanding of these sales, nor the undeniable similarities to PPI.

The FOS is supposed to be the backstop, providing informal, fair, consumer-focused, and grounded in how financial services should work in practice, not just what a form says.

But in this area, we see worrying signs that institutional knowledge has faded, and fast. The turnover of employees at FOS has clearly resulted in a loss of experience of how PPI was sold, which in turn has resulted in poor investigations and a lack of understanding.

So we end up having to explain things that should be foundational:

• A dealership can be an insurance intermediary, with regulatory duties.
• Demands & needs is not satisfied by a generic statement (often pre-populated) detached from the customer’s circumstances.
• A GAP sale is unsuitable if the customer’s primary motor policy already provides “new for old” replacement for the relevant period.
• A GAP sale is unsuitable if the term of the cover does not match the term of the finance agreement.
• The existence of documentation isn’t proof of a compliant sales process—especially when the documentation is boilerplate.

Even more concerning is the day-to-day quality issue with investigations that fail to request the relevant evidence. If the seller says “we did a demands & needs assessment”, the next step shouldn’t be to accept that at face value. The next step is to request it and obtain evidence to support it.

• What questions were asked?
• What answers were recorded?
• What training and scripts were used?
• What evidence was requested and obtained?
• What product literature was provided at the time?
• What exclusions and limitations were explained?
• Was “new for old” discussed at all?
• Was product term discussed at all?

If none of that exists, it’s not a minor gap in the file. It’s indicative of a mis-sale.

The minimum expectation of a competent FOS approach must be: ‘if the product may be redundant for a common and foreseeable reason (like “new for old” cover on a new car), the seller should have checked’.

Not as an optional extra. As part of a basic selling responsibly.

What we’re demanding from FOS

This isn’t about being anti-FOS, as much as it may appear. It’s about protecting the credibility of the system and ensuring consistency for consumers.

A better approach would look like this:

• Treat dealership GAP as regulated distribution, not retail upselling.
  Investigations should reflect the responsibilities that come with selling insurance.
• Make demands & needs evidence-based.
  If the seller can’t show what was asked and recorded, don’t assume it happened – look at PPI.
• Handle “new for old” as a standard suitability checkpoint for new vehicles.
  If the seller didn’t check whether it applied, assume ‘new for old’ existed.
• Ensure the policy matches the requirement.
  If the GAP term and finance agreement term is a mismatch, there is a clear suitability red flag.
• Stop using signatures as a substitute for suitability.
  A signed document proves a sale occurred. It does not prove it was appropriate.
• Raise the bar on investigator training and internal guidance.
  These cases shouldn’t depend on whether the consumer (or their representative) happens to educate the investigator.

The basic bottom line

This shouldn’t be a niche argument. It’s the basics of selling insurance fairly.

When a consumer buys a new car, and their comprehensive insurance is highly likely to include “new for old” in the first year, selling GAP without checking that reality is not a harmless oversight.

And when the consumer complains, they should not have to become the trainer in the room.

If the FOS has lost the muscle memory from the PPI era—about add-on sales, suitability, and the misuse of paperwork as a shield then we’ll keep doing what we’re doing by rebuilding that understanding case by case.

But we shouldn’t have to.