The UK’s automotive finance is wary of a shift in power planned by the Government, which intends to abolish the Financial Services Authority (FSA) and give more regulatory power to the Bank of England.
The Finance & Leasing Association is asking the Government to state where the Office of Fair Trading’s current responsibility for consumer credit will end up.
An FLA statement said: “We want to know if it will stay with the OFT or be moved to the new Consumer Protection and Markets Authority. This will affect motor finance providers as they are licensed by the OFT.”
The FLA is also pressing for clarity on the Government’s attitude towards financial regulation .
Many dealers will welcome the abolition of the FSA by 2012 when the Government intends to have a new financial structure in place. The FSA’s burdensome regulations on the sale of financial and insurance products caused considerable resentment. Some dealers pulled out of the sector.
In their election campaign, the Conservatives made clear their determination to streamline financial regulatory bodies.
Chancellor George Osborne confirmed that he will give the Bank of England the key regulatory role. The FSA will cease to exist in its current form, but chief executive Hector Sants, will stay on to oversee the transition.
Sir John Vickers, former head of the Office of Fair Trading, is to chair a commission to look into the potential break-up of the UK’s biggest banks.
The commission will take at least a year to review whether investment banks should be split from deposit-taking institutions on the high street.
Osborne said the Government was proposing a new system of regulation that “learns the lessons of the greatest banking crisis in our lifetime”.
Alphera grows product range
Alphera, BMW Group Financial Services’ multi-make retail arm, is planning to launch a tyre
insurance product soon and other revenue streams later for dealers, said director Spencer Halil.
Shortfall Insurance, added this summer to Alphera’s range, can be bought in showrooms or, following a quote via www.alpheraprotect.co.uk.
Halil said: “Shortfall Insurance is a good additional sales opportunity for motor retailers because many customers are unaware of the potential problems that can arise if a financed vehicle is written-off by their motor insurance company.”
Policyholders are covered for up to four years on new and used vehicles with a maximum claims value of £35,000. This includes dealer-fitted accessories valued up to £2,000 in the premium, which they can pay in a single payment or instalments.