Alphera Financial Services has revealed the details of the new pricing structure for its dealer and broker partners across the UK. The new approach will be rolled-out across its partner network from January 1.
The updated approach is thought to be the first move of its kind to be announced in the independent motor finance sector.
Andy Gruber, director of Alphera Financial Services, said: “In developing our new pricing structure, we basically focused on three key pillars: it should ensure the best outcome for customers, it should be simple and it should allow dealers to maintain their levels of profitability.
"Based on the overwhelmingly positive market feedback we’ve received in the trial stages, I am pleased to confirm that our new pricing model delivers on all three objectives."
“The key feature of our new pricing model really is its simplicity. There will be no customer fees anymore, apart from a nominal option-to-purchase payment.
In addition, we have removed the need for any volume bonus and will instead pay a fixed commission at a capped rate, regardless of the product, term or age of the vehicle. Should the dealer see the need to discount this offer to help enable a customer purchase, a simple table will show how much this will cost.”
Alphera is also going to announce a number of partner support products in the next 12 months. These will include customer retention tools, relationship management support and regulatory best practice workshops.
“As we enter 2015 and the first full year of FCA authorisation, it is vital that the motor retail sector shows that it has listened to the regulator and is making the necessary changes to demonstrate that the customer is at the heart of all business decision-making, Gruber said.
“We’ve been working on evolutions to our business model for a number of years now in order to boost retention and customer loyalty. However, with increasing clarity about what is – and is not – acceptable, we felt the time was right to put our stake in the ground and demonstrate our commitment to treating the customer fairly.”
Over the past 18 months, Alphera has carried out a series of best practice briefings, workshops, conference presentations, roadshows and webinars (including one with AM) to communicate the requirements of the changing regulatory and consumer retail environment to motor dealers and brokers.
Kirk Franks, head of national sales at Alphera Financial Services, said: “We’ve embraced the changing retail landscape early and this means we are in a strong position to work with our dealer and broker partners in order to introduce new ways of managing customer relationships fairly, while still driving retention and delivering on the bottom line.
“Indeed, the focus of our updated approach is around being simple and compliant, yet ensuring our partners are able to remain profitable and continue to write sustainable business.”