Rance said preparation was key: an in-depth, well thought-through application was the first step to straightforward authorisation. Applicants should allow sufficient time to get their submission in shape.
“More dealers are coming to realise a new level of processes and controls will be required for compliance,” said Harris. “Many, it would appear, have left the required change very late.”
Codeweavers has created a ‘deal selector’ tool to help dealers meet FCA regulations – it means retailers and customers can compare finance offers.
“It ensures the finance product selected is based on what suits a customer,” said Harris. “Regulation may be forcing the pace of change, but I believe dealers will come to see it was the catalyst to ensure that, often provided online, dealer finance is the best place for car buyers to access the loan they need.”
James Tew, director at iVendi, said his company’s new digital platform would not make dealers FCA-compliant, but could help them to achieve it.
“It assists both customer and dealer – we bring the two sides together while providing what each wants,” he said.
“We see the showroom as the place for eventual fulfilment – the final stage of car buying, which increasingly begins with online research.”
Tew said the core difference between iVendi’s platform and others was connectivity. It provided the buyer looking for a car on a dealer’s website with all the information they needed, while storing it for the dealer, who then had a strong lead to follow up.
“This fulfils a core FCA compliance benchmark,” said Tew. “Some prospective buyers feel trying to find the right finance product is like entering a digital minefield. We help those who struggle to cope with the latest digital technology.”
Mind the GAP: insurance not Included in loans compliance
Gaining FCA authorisation to provide loans for cars will not entitle dealers to sell insurance add-ons such as GAP insurance, which requires separate permission from the FCA.
David Parrondo, deputy managing director at Mapfre Abraxas, said: “Ensuring compliance for consumer credit will rightly continue to be a priority for dealers, but we’re also in a very important phase in the FCA’s review into add-on insurance products.”
Parrondo said insurance providers should be offering support and guidance to dealers, and assuring them that they have a strong voice in providing input to the consultation process.
max - 03/10/2014 12:12
“The process demands documents such as regulatory business plans and that the dealer can actively demonstrate the customer is the central focus of its business activities and is treated fairly. In many instances, the dealer simply doesn’t know what information the FCA is asking for, or they cannot provide the information as they do not track it.” Dealers have an expectation, that ‘someone else’ will take care of this for them. Manufacturer / finance houses / compliance gurus and consultants / trade bodies, the list is endless. When will the motor dealers realise that there are regulatory matters that are 100% their personal responsibility? Sure, by all means gather as much help and opinion that is available, but there is no substitute for reading the handbook rules and governing principles. Ah, will come the reply, it’s hard, the language isn’t always easy to follow and a hundred other reasons why it can’t be done……. Rather than accepting some things just are 'hard' and need the effort. After all this shouldn’t be wasted tick box time, it should all be quality transparent business practice. Much of it may exist already, but most of which will not be recorded, monitored or easily articulated. Your customers deserve to be treated fairly, and you have a regulator who insists on it. A regulator who is so much better than the FSA, in explaining itself, publishing speeches with direction, issuing guides / notes / and help, to try make it easy as it can for all the firms it regulates. Engage, evolve, do the detail, truly understand that ‘you just don’t sell cars’ – you are well and truly into selling F&I, and your customers deserve you do the very best by them. Do it for the right reasons, the customer, but keep in mind, the regulator will likely show their teeth soon, and the vultures of the CMCs will be circling all too soon. I return to the extract at the top – it’s phrased as though it’s in some way unreasonable for the FCA to ‘demand’ such documents. Isn’t there another way of looking at it – it’s not what the regulator is asking for per say (though a lot is prescriptive) but what the business should already be able to provide the FCA (or anyone, including themselves and customers) to explain that they are meeting the requirements. Why don’t dealers track this? Maybe because, the true ethos of TCF eludes them, or that they still don’t see the rules apply to them, as it’s someone else’s responsibility? If you are an Approved Person, or a director with significant functions, it’s your responsibility.