CMA u-turn on cost of replacement vehicles bad news for consumers
The Competition & Markets Authority’s failure to tackle the excessive charges made by credit hire firms for replacement vehicles is bad news for consumers. Far from driving down excessive costs, this U-turn on their proposed cap on these charges is likely to lead to higher charges for consumers.
Commenting on the CMA’s final report of its investigation into the private motor insurance market published today, James Dalton, ABI’s Head of Motor Insurance, said:
“Today’s CMA report is the culmination of three years of work and has cost taxpayers millions of pounds. The fact that it fails to do anything to address the excessive costs of replacement vehicles – a problem that the CMA itself identified – will be a bitter pill to swallow for honest motorists. Far from reducing the cost of car insurance, the CMA’s inaction simply entrenches the business models of some replacement vehicle providers who profit from inflating car hire charges at the consumer’s expense. The reality is that the CMA has ducked this challenge and when regulators fail, politicians need to step in to act.
On the other measures in the report James Dalton said:
Banning restrictive price arrangements by price comparison websites (PCWs)
“We have long argued that these clauses, which prevent insurers from offering a cheaper deal to customers through their own website or another PCW, should be banned. So consumers should welcome this move which should provide more options when shopping around.”
Better information for consumers about policy add-on products
“Consumers need relevant and clear information to make an informed choice about the add-on products they are buying, and we are already working with the Financial Conduct Authority in this area.”
Malcolm Tarling MCIPR
Chief Media Relations Officer
Operations Directorate
Malcolm.Tarling@abi.org.uk
T: 020 7216 7410
M: 07776 147667
Follow the ABI on Twitter @BritishInsurers
www.abi.org.uk
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