Trade wins reprieve on car hire

ABTA has claimed victory in the battle to save agents’ revenue from car hire sales threatened by the shake-up of insurance regulation next year.

Earlier this year it emerged car hire sales were not included in ABTA’s opt-out scheme, which meant agents would be forced to comply with costly Financial Services Authority regulation to keep selling car rentals that include mandatory insurance.

However, following talks between the FSA, ABTA and key industry figures, the regulator has clarified that agents can sell car hire in specific instances.

ABTA head of financial services Mike Monk said he was delighted with the result, hailing it "a practical solution” to the problem.

The FSA has agreed agents can sell car hire as long as they are selling other travel products which would require baggage insurance.

Holiday Autos, which worked with parent company Lastminute.com and First Choice’s First4extras to lobby on the issue, pledged it would fight until the matter is resolved.

Commercial director Ian Coyle commented: "It’s what our business is all about and it seems logic has won through.”

Ski Independence managing director John Bennett had written to ABTA calling for an update on progress, concerned he might lose revenues from car hire sales on 35% of tours to the US .

"We had no doubt common sense would eventually prevail,” he said.

The arrangement still excludes car hire-only sales through agents, but Monk said this isn’t an issue as consumers would not buy car hire on its own from travel agents.

Top-up liability insurance, which affects sales to some US states, is also omitted from ABTA’s deal, but the association said few members would be affected by this.