By Tony Willard
Dealers should embrace the new Financial Conduct Authority framework to change how they promote loans and deliver a fresh approach digitally aimed at younger car buyers, said Shaun Harris, sales and marketing director, Codeweavers.
“A new generation of digital natives wants speed, simplicity and transparency,” he said. “According to new research, 65% would already prefer to buy online, without speaking to a salesperson.”
Harris said the new regulatory framework was heavily focused on creating a better consumer outcome and should drive change in the way finance is promoted and, importantly, delivered digitally. “That is because it meets the way consumers now approach the purchasing process for major items, rather than simply to comply with regulation,” he said.
Chris Sutton, managing director, Black Horse, said the arrival of the FCA raised questions for finance companies and dealers. One was how they will demonstrate a customer can afford a particular car.
“This means thinking about its long-term suitability and whether it is the most appropriate one for a customer,” he said.
“Another big question is how incentive and reward structures between lenders and dealers can be constructed so they don’t result in adverse customer outcomes, but still provide appropriate income for dealers.”
Sutton said the new rules were to streamline credit and were not a box-ticking exercise for motor finance.
“The enhanced transparency the rules will deliver can only improve customer satisfaction, trust and loyalty. No one can question that this will be anything other than a good thing for the industry.”