WITH showrooms set to re-open in England, Wales, and potentially Northern Ireland on April 12th, joining those in Scotland which are already open, dealers need to be ready for face-to-face contact with better informed, empowered and protected consumers who are increasingly likely to shop around for their car finance.
That’s the observation from MotoNovo Finance Deputy Chief Executive Karl Werner reflecting on recent research published by the FCA in February that provides crucial insights on the impact of COVID-19 on consumer behaviour when it comes to the management of their finances;
- 38% of consumers shopped around for their car finance
- 60% of consumers shopped around for their personal loan
- Consumer satisfaction and trust ranked higher for personal loan providers
As a result of COVID-19, a very significant 29% of people are more likely to shop around for financial products and this excludes insurance.
Werner said: “The FCA works reveals a classic ‘opportunity and threat’. Focusing on the opportunity, already high levels of people researching personal loan needs are likely to increase.
“More people could consider dealer finance if it is competitive against a personal loan option. It is why a risk-based pricing approach from dealers is so much more compelling than a fixed interest rate, as personal loan providers continue to demonstrate. The obvious risk is in not doing this.”
Werner pointed to three actions that dealers should already be embracing ahead of reopening and to comply with FCA requirements.
- Review and update your online finance promotional activity to ensure you have a competitively priced proposition ready to capture car buyers interest as they shop around online – being conscious of financial promotion requirements;
- Ensure that you have all necessary processes and controls in place to support Commission Disclosure requirements online and in the showroom;
- Develop your online finance proposition and capabilities to support a transparent customer controlled finance journey.