Closer matching of customer and finance should mean that fewer car buyers reach the point where they are making an application likely to be rejected. The detailed process of finding out the customer’s needs and working to meet them should mean that by the time they are applying for finance, they should have a high likelihood of acceptance.
Report indicates evident changes in buyer behaviour driven by the economic changes of the last year, identifying some of the critical challenges facing dealers in sourcing stock and accommodating customers’ financing wishes.
While FCA's letter centres on consumer lending it is not explicitly focused on dealer finance, Tara Williams, Chief Compliance Officer AutoProtect Group, is clear that when taken in conjunction with previous concerns about firms' preparedness for the Consumer Duty, dealers need to review and where appropriate, step up their plans.
Mobility provider SOGO's research findings indicate that only 14% of drivers would be much more likely to commit to a long-term financial lease to fund their next vehicle than 12 months ago and that 37% of motorists believe short-term leases are more beneficial because of the financial flexibility offered. However, 16% believed they wouldn’t benefit from a short-term lease on a new vehicle.
VCFSUK is the provider of retail and wholesale funding for Volvo Cars’ UK retail network, as well as Polestar and LEVC. The company provides competitive finance products for customers purchasing new and used vehicles. It was established in early 2021 as a 50:50 joint venture between Volvo Cars and Santander Consumer (UK) to provide quick responses to changing market dynamics.
Customers opting for this route can also take advantage of Vauxhall’s ‘Plug and Go’ offer for electrified vehicles, helping make electric mobility even more accessible. As part of ‘Plug and Go,’ customers purchasing an electric or plug-in hybrid vehicle enjoy a number of core benefits as standard, including a battery warranty of eight years/100,000 miles and eight years’ roadside assistance.
Key is to have a fair and transparent panel of lender products to offer to customers, showing compliant processes and value to the end consumer. This will largely be reliant on IT system providers in both the showroom and digital space to provide data such as audit trails that capture and can demonstrate compliant selling across a panel of lenders; data on market finance rates to ensure dealer offerings remain competitive; and sufficient insight across all their lending partners to produce accurate representative examples.
The FCA reviewed a sample of implementation plans and found that many firms show they understand and embrace the shift to delivering good customer outcomes, which the Duty will bring, and have established extensive programmes of work to comply with it properly. It also found that some firms are further behind in their planning, so there is a risk that they may struggle to apply the Duty effectively once the rules come into force.
A series of third-party agreements will soon be announced providing products and services in support of the RAC Dealer Network's 1200+-strong group of used car, van, motorcycle and motorhome retailers.
New, simplified customer journey is a fast, easy and safe way for customers to find their best auto-finance options, see previous searches through a standalone section in the myfreedom. The upgrades also include a calculator that encourages people to compare how PCP, HP & car loan products vary before proceeding with the full application form.
