This was the best July performance since 2020, when pent-up demand for new cars was unleashed following three months of lockdown during the pandemic. Despite this continuous growth, however, the overall market year to date remains behind pre-pandemic levels.
Startline’s July Used Car Tracker shows the biggest concerns are high values of used cars squeezing margins, cost of electrification such as installing chargers and rising staffing costs . Other major worries include increasing difficulties surrounding compliance and the cost of infrastructure including showrooms.
If dealers implement Consumer Duty correctly, it will potentially create new avenues for business. That’s because it fundamentally requires detailed information to be recorded about how buyers behave and this provides greater insights, as well as providing a more structured and better-informed customer journey.
Dealers are reviewing their finance and insurance (F&I) products, processes and pricing structures to determine whether they can provide the evidence required by the FCA that they are delivering good consumer outcomes.
Called “Navigating Consumer Duty Regulations in the Automotive Sector” it includes a step-by-step examination of the responsibilities that the new regulations create, explanations of what dealers and lenders need to do to show that they are being met, and an analysis of how the right IT systems can resolve these needs.
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 new Consumer Duty aims to ensure dealerships providing financing and insurance products provide truthful information across their websites and all social media platforms. They will also have to demonstrate customer responsibility and support in terms of price and value of cars, as well as products and services offered, all of which will impact dealerships providing financial and insurance products.
The ability to record, review and audit all aspects of the consumer journey in one place will prove an important part of the new responsibility to “put customer needs first”.
With attention now turning to the FCA's announcement on their proposed Consumer Duty plans, dealers can see this regulation as an opportunity to improve consumer perceptions of used car dealers still further and as MotoNovo's Commercial Director Debbie McKay said consumer regulation can be an opportunity today to differentiate the dealer model.
