The majority of motorists don’t know that dealers’ sales staff should discuss their financial details when buying a car in finance.
A study by Alphera Financial Services revealed 64% are unaware of salespeople’s obligations around understanding a customer’s financial needs and requirements when selling finance and insurance products.
Gerry Kouris, Alphera Financial Services’ marketing manager, said: “The deficit, between a dealer’s obligations and customers’ awareness of their rights, means sales staff must clearly explain every aspect of a finance product, and properly assess the customers’ needs.
“If dealers can address this gap and offer total transparency, they can empower customers to make an informed decision, giving them confidence that a finance product is truly appropriate for them. In the long term this approach will foster greater customer loyalty and more sustainable income for dealers.”
The findings are the result of a UK-wide consumer survey commissioned by Alphera, BMW Group’s independent motor finance division, of 1,035 owners of various cars brands.
The survey found that more than half of motorists (58%) were unaware that dealer sales staff are responsible for discussing repayment obligations.
The same proportion of respondents were unaware of the responsibility to outline a finance product’s terms and conditions and details of additional charges. 77% of respondents didn’t know that dealers must outline how purchasing a vehicle on finance may affect their credit rating.
The survey underlines heightened concerns about the sale of finance products in the wake of historic mis-selling of PPI (payment protection insurance) by many finance lenders and banks.
Alphera accreditation scheme
In seeking to improve standards across the industry and enhance transparency in the sale of car finance, Alphera is working with the Institute of the Motor Industry (IMI) to introduce a new accreditation scheme for finance and insurance (F&I) sales specialists – with the first assessments taking place in June.
The accreditation scheme complements established Specialist Automotive Finance (SAF) programmes from the FLA, adding a more practical application of skills and knowledge. All participants will need to have passed the standard SAF competence test before completing the IMI F&I Accreditation.
“The accreditation scheme aids self-regulation to support compliance with Financial Conduct Authority (FCA) rules and guidelines,” said Kouris.
The FCA recently announced plans to carry out a programme of ‘mystery shopping’ among UK car retailers throughout 2018 to gauge the level of compliance in car finance sales.