Given the increasing number of job losses being announced, I encourage consumers to shop around and take the unemployment option in their Loan PPI. Independent British Insurance charges £3.40 per £100 for unemployment cover only and £3.90 per £100 for accident, sickness and unemployment.
Braintree, Essex (PRWEB) October 9, 2008
As banks and building societies tighten up their lending criteria, consumers are at risk of a double whammy, warns PPI lobbyist Sara-Ann Burgess from Burgesses. "People are turning elsewhere for credit which means they are likely to pay more in interest over the lifetime of their loan and fork out excessive premiums for any accompanying Payment Protection Insurance, which in some cases will be totally unsuitable for their circumstances."
In the motor industry, sales of new and used cars are down, but the number of consumers turning to their local showrooms for finance is up - a clear indicator that High Street banks and building societies are no longer the main source of credit for a dealership car.
The Society of Motor Manufacturers and Traders reports used car sales have slumped from 7.7m in 2004 to 7.4m in 2007 and new car registrations have gone from 2.5m in 2004 to 2.4m in 2007. In August this year, new car registrations were 63,225, the lowest since 1966.
However, the Finance and Leasing Association reveals the point of sale finance penetration via a dealership has risen from 46.2% a year ago to 50.7% in July this year.
Two months ago five motor retailers were fined £175,000 by the Financial Services Authority for exposing 2,175 customers to the risk of being sold unsuitable PPI policies and Sara-Ann is concerned that as dealerships continue to increase their quota of finance agreements, more people could become victims of PPI mis-selling.
She comments: "These retailers seriously breached FSA guidelines - they didn't gather information about their customers, re; their suitability to purchase PPI or whether they were eligible to claim, failed to ensure proper sales processes were followed and neglected to assess complaints.
When finances are stretched, the last thing consumers want is to pay over the odds for cover they don't need or will be unable to make a claim on.
"People sourcing finance from a dealership should purchase PPI to protect their monthly loan payments. If they are unable to work due to accident, sickness or unemployment, this cover will meet their financial commitments. However, purchasing PPI is not part of the condition of the loan, if the dealer says it is, the company is breaching FSA guidelines. PPI can and should be sourced independently, via a specialist provider where in many cases it's around 10 times cheaper."
Sara-Ann concludes: "Given the increasing number of job losses being announced, I encourage consumers to shop around and take the unemployment option in their Loan PPI. Independent British Insurance charges £3.40 per £100 for unemployment cover only and £3.90 per £100 for accident, sickness and unemployment."