Car insurance warning

New FSA rules that come into force in 2005 would preclude over 90 per cent of car dealers from selling insurance products to customers.

15:27 05 January 2005

New FSA rules that come into force in 2005 would preclude over 90 per cent of car dealers from selling insurance products to customers.

Currently, less than ten per cent of car dealers have received accreditation from the FSA, meaning that over 26,000 traders will be unable to sell insurance products.

After January 14th it will be illegal for a firm to sell insurance to a consumer if it has not applied for proper authorisation.

Gary Warren, managing director of car supermarket Motorpoint, said: "The new laws have come in to protect the customer. Customers should always ask if a firm is authorised before doing business with them, if a firm is unregulated and you buy an insurance policy from them after January it won't be covered by FSA rules.

"That means, if something goes wrong you won't have access to the Financial Ombudsman Service," Mr Warren added.