12:53 pm, November 27, 2008
PAYMENT Protection Insurance schemes have seen an increase of 146 per cent during the last quarter.
This is because borrowers are losing confidence, and are seeking to protect their loans in the face of recession and job losses.
It presents a real profit opportunity to car dealers.
Repossession is borrowers’ big fear. ‘Over the past few weeks, our phones have been ringing off the hook with enquiries from worried borrowers who want to buy themselves peace of mind,’ said PPI expert paymentcare.co.uk’s MD Shane Craig.
‘Their perception of risk has changed. People who wouldn’t have considered the idea of insurance this time last year are no longer confident that they can escape the credit crunch unscathed.
“Despite the recent rate cuts and drop in inflation, their confidence in the future has been badly shaken, and they can see the value in being better safe than sorry.”
Many of paymentcare.co.uk’s callers are borrowers who did consider the idea of PPI when they took out their loans, but decided the cost of their lender’s own protection was too high.
But now that the threat of redundancy is a real consideration, they have revisited the subject, and have sought out the most affordable way of protecting themselves.
You might therefore find greater uptake in new buyers taking out PPI. But it is also worth revisiting your database, to remind past customers that you can sell PPI, too.
In the face of falling sales, it could be an unexpected extra revenue stream.
