Escalating documentation fees charged by finance providers are playing a significant role in pushing car buyers into the arms of direct lenders, according to a major multi-franchise retail group’s F&I specialist.

David Johnson, group F&I manager for Perrys Motor Sales, says: “Documentation fees are seen by many people seeking point of sale finance as an initial or final hurdle in sorting out their funding.”

He claims that the sums charged, particularly by captive manufacturers’ lenders have grown “out of synch” from respective “front and back end payments” of £75 and £25 to current equivalent fees of £150 for acceptance and an £80 option to purchase levy.

Johnson, who oversees 44 outlets, adds: “I feel passionately that franchises that are not finance friendly and cannot support a business manager struggle to overcome documentation fees in the current competitive environment.”

He maintains: “The customer is seeing a substantial increase and this has become a significant factor in them going elsewhere. They are considered to be obstacles rather than spread across an agreement’s term. The charges vary dramatically and have got out of control.”