Car dealers 'demanding more support over regulation concerns'

The threat of regulation is knocking the confidence of franchised dealers and is just one of the factors leading them to demand more training and support from their service providers. The winners of the AM Reader Recommended 2014 awards highlighted the trend at a recent AM roundtable discussion. Attendees said they were increasingly supporting franchised dealer customers because of a “nervousness” over regulation and concern about forced changes to their sales processes.

David Parrondo, general manager, Mapfre Abraxas, said the demand for training for non-regulated products and FCA compliance was a good opportunity, because it would make dealers review their product strategies, which would benefit suppliers with good products, good systems and good training.

Black Horse managing director Chris Sutton said his company was also offering dealers support to understand and comply with the new consumer credit rules.

“We are providing our dealer partners with guidance and training to ensure that they are able to implement these changes. This includes information and support through our dealer portal, training sessions and our managers are investing the time to meet with dealers to provide additional assistance on what the changes will mean for their business.”

Car Care Plan chief executive Tim Heavisides said recommendations from the FCA would have a significant effect on the marketplace and its proposed remedies could seriously damage GAP in the dealer channel.

He warned that the FCA’s behaviour was “inconsistent” and it seemed intent on not just putting the customer at the centre of the business, but on preventing dealers selling GAP at the point of sale. He said the FCA’s mechanism for determining the true value of a regulated product ignored the purpose of insurance in transferring risk and giving peace of mind, and the consumer value attached to that transfer varies depending on the individual.

“The remedies are detriment, frankly, and that’s why we’re so keen to persuade them to come up with alternatives,” he said.

Emac consultant Graham Filmer said the way cars were sold would have to change and pointed out how mortgage market brokers used to make lots of money, but now have to charge a fee because they cannot earn a commission.

“Car dealers might just have to earn money from the metal, which will be a shock. This may strip it all back, but then I suspect car prices would have to rise,” he said.

Five of the AM Reader Recommended 2014 winners: (L-R) Tim Heavisides, chief executive, Car Care Plan; Angela Barrow, chief executive, Emac, Sue Healey, key account manager, Supagard; David Parrondo, general manager, Mapfre Abraxas; Stephen Meadows, development director, Pinewood

talent & people

Author: Tim Rose

Editor

tim.rose@bauermedia.co.uk

01733468266

As editor, Tim is responsible for the media content, planning and production of AM's multiple channels (AM print and digital magazines, website, social media and contributing to our events planning). He interviews and writes about as many franchised dealer groups and UK divisions of motor manufacturers as possible, to explore the issues facing UK motor retail and understand what solutions dealers and suppliers are using to overcome these.

Comments (3)

Login to comment

Comments

Gerry Taylor - 16/09/2014 15:25

If all car dealers, franchised or otherwise were to train their staff in terms of the requirements of legal compliance by obtaining external training and assistance their worries would be minimised. The cost is considerably less that the profit on one car per year!
- 0
- 0
gezza - 17/09/2014 10:54

The dealerships with most to worry about are the ones who continue to hard sell insurance products at hiked-up prices, and hopefully the FCA will be able to curtail this practice.
- 0
- 0
max - 17/09/2014 14:31

All valid points - but is the truth not that a significant proportion of dealers are living in the dark ages, worse still, behaving that way too. ‘‘It looks complicated so I won’t bother’’ ‘err I’m only a humble car seller, this isn’t my issue’’ ‘’I’ll make as much on add-ons that I can whilst I can’’ – Customers and claims management co’s – smile at the prospect of fat returns. The FCA for scalps to make examples of. Getting some dealers to engage properly, or let alone to pay for quality compliance consultancy is v hard indeed. Look at the headline - Car dealers 'demanding more support over regulation concerns' - Demand of whom? It’s their responsibility and the sooner Approved Persons woke up to the facts the better. Mr Heaversides is right, clearly the FCA has a responsibility here too, in understanding the market, before dabbling in it. However, where they find poor credit practices and unjustifiable profiteering in general insurance sales, the industry has only itself to blame. Why should the FCA worry about a part of the market they aren’t responsible for, when they have so many, often reasonable concerns, about the bit they do regulate. Not that in dealer world they will accept ‘if the cap fits’, it’ll always be someone else’s fault, that they didn’t bother to do the detail and get the rules right. Short term wins – everyone loses mid-term.
- 0
- 0