The Grotesque GAP Commission Award Has a New Leader: Step Forward, Motorpoint

We have a new winner for the grotesque GAP commission award.

Step forward, Motorpoint.

And what a performance it is.

This latest example shows a total gross underwriting premium of just £57 for the GAP product, yet the consumer was charged a staggering £429.00. Let that sink in for a moment. A product costing £57 at underwriting level somehow leaves the consumer paying £429. That is not a modest markup. It is not a tidy profit. It is not “just how the market works”.

It is an outrage, and yet again the FCA is asleep at the wheel.

And when the commission level comes out at a grotesque 86.7%, the question is no longer whether there is a problem with GAP insurance. The question is how anybody in authority was allowed this to carry on for so long.

GAP is not a new problem. It is not an emerging issue. It is not some quirky little side concern buried in the small print of the motor trade. It has been happening for years, in all likelihood to replace the lost revenue of PPI. Consumers have been sold wildly overpriced policies, often in circumstances where the paperwork is inadequate, the value is dubious, and the profit margins are eye-watering.

Now the numbers are becoming impossible to ignore.

£57 In. £429 Out.

Strip away the jargon and this is what you are left with…

A product with a gross underwriting premium of £57 ended up costing the consumer £429.

That means £372 was piled on top.

That is where the real story is, and the latest scandal on the conveyor belt.

The real story is in the staggering difference between cost and price, and that is where the ugliness lives.

When the overwhelming majority of the money paid by the consumer is not going toward underwriting risk, but toward commission and margin, this stops looking like insurance in any meaningful consumer-friendly sense. It starts looking like a profit-harvesting exercise attached to a vehicle sale.

GAP Is the New Scandal

Let us say plainly what the regulators still seem reluctant to confront.. GAP is the new scandal.

We’ve been building the evidence for years, while the FCA quickly brushed matters under the carpet. Complaint after complaint. File after file. Case after case. Inflated premiums. Nonsensical demands and needs processes. Consumers paying hundreds for products that appear to have been designed less for protection and more for extraction.

And still the response from the system has been painfully slow.

Where is the urgency from the FCA? It hasn’t event acknowledged receipt of our evidence of DCA’s in GAP.

Where is the knowledge and understanding within FOS? It seems to have lost all of its best people after PPI concluded.

How many more examples do they need before somebody stops pretending that this is all a matter of isolated bad practice? At what point do grotesque commission levels cease to be treated as unfortunate quirks and start being recognised for what they really are, a glaring sign that something has gone badly wrong in this market?

Because when a £57 product is sold for £429, nobody can seriously maintain that this was driven by consumer value.

It was driven by opportunity.

Opportunity to load the product.
Opportunity to exploit the sales environment.
Opportunity to profit from the fact that most consumers never get to see what sits underneath the price.

A Market Built on Consumer Ignorance

That is one of the most offensive parts of all this.

Consumers were never handed the full picture. They were shown the sales price, not the true economics. They were not told, in any meaningful way, that the actual underwriting cost could be a tiny fraction of what they were being asked to pay. They were not told that the product sitting in front of them may have been carrying commission at levels that would make even seasoned observers wince.

Why would they be?

Because the entire model depends on the consumer not knowing.

Conceal the facts, take the money and hope nobody finds out. This isn’t a pattern, this is a culture that has been facilitated by a weak regulator and weak leadership.

The less the customer understands, the easier it is to present these products as sensible, prudent, and worthwhile. But once the numbers are exposed, the illusion falls apart very quickly.

And that is exactly why this issue is becoming more dangerous for firms by the day.

The more these cases come to light, the more obvious it becomes that GAP was never merely an overlooked add-on. It was a highly lucrative stream of income hiding in plain sight.

Wake Up, FCA. Wake Up, FOS.

This is the point where the regulators need to decide what they are for.

Are they there to protect consumers, or are they nothing more than an industry damage control mechanism?

Because from where we are sitting, the message being sent to the market is hardly a deterrent. Firms have had years to make vast sums from these products, while the watchdogs appear to move at the pace of a sedated snail.

The FCA should have been all over this years ago.

The FOS should not need repeatedly educating on the basic ugliness of these figures.

And yet here we are, still uncovering commission levels so absurd that they would sound made up if they were not sitting there in black and white.

So let this latest example serve as a warning shot.

Wake up, FCA.
Wake up, FOS.
We’re knocking at your door, and we’re not taking no for an answer.

Because GAP is not going away.

Quite the opposite.

This is building.
This is spreading.
And this is about to blow up.

The firms involved may not like hearing it. The regulators may not like being reminded of it. But the numbers speak for themselves.

A £57 underwriting premium.
A £429 charge to the consumer.
A grotesque 86.7% commission level.

That is not a healthy market.

That is the anatomy of the next financial scandal.