Motor finance will change “significantly” this year and dealers should be ready for a year of transition, according to dealer technology company iVendi.
The company says that potentially, FCA regulation will dramatically affect which dealers will sell finance and how, while technological developments will create a whole host of new online sales opportunities.
James Tew, iVendi director, said: “There is a possibility that, by the end of 2014, the whole landscape of motor finance will be significantly different from today.
“While the industry, as a whole, is still working through the implications of FCA regulation, there is a distinct possibility that it will lead to hundreds or even thousands fewer dealers selling motor finance and change completely how the remainder handle the motor finance products.
“Meanwhile, emerging technology will mean that much more motor finance will effectively be sold online as dealers offer a broader range of options completely integrated into their standard web offering.
“There is even a possibility that the auditable structures demanded by the FCA will power faster adoption of these web tools, which provide off-the-shelf infrastructures.”
Tew added that the underlying question facing the industry in the light of these changes was how to ensure that motor finance continued to be an attractive option when compared to personal loans.
He said: “Personal lenders will return in force to the motor sector at some point, the only question is when? With so much upheaval going on, they might view 2014 as an ideal opportunity to re-enter the market.
“Dealers and motor finance providers need to ensure that they are fully prepared for this eventuality, providing high value, effective finance options that are sold in a way that meets customer desires.”
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