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November 7th 2019
NEC, Birmingham

2019 Motor Finance Theatre

Back by popular demand is the Automotive Management Live Finance theatre, bringing together inspiring keynote speakers from the field of motor finance.

Three expert speakers will explore the latest insights and developments including discussing the latest news from the Financial Conduct Authority’s (FCA) review of motor finance.

If you’re wondering what impact the FCA review of motor finance may have on your car dealership, the finance session at Automotive Management Live at Birmingham NEC is right for you.

AM LIVE’s F&I Theatre featured in our 2016 and 2017 shows and whilst FCA compliance has been an on-going concern for retailers, the regulator’s renewed focus is creating some disquiet in the sector.

 

2019 Speakers Include:

 

  • Russell Kelsall, Head of Consumer & Motor Finance, TLT LLP

  • Neil Smith, Business Operations Director, Imperial Car Supermarkets

  • Karl Werner, Deputy CEO, MotoNovo

 

Key topics in the FCA’s spotlight include:-

 

Broker commission

The organisation estimates broker commission which allows brokers a wide discretion when it comes to setting the customer interest rate, costs consumers £300m a year compared to a baseline of flat fee models. On a motor finance agreement of £10,000, the FCA estimates the broker commission could mean the customer pays out around £1,100 more in interest charges.

 

Vulnerable customers

The FCA has also issued draft guidance when selling motor finance and insurance to vulnerable customers and its definition is wide-ranging including those aged under 24, over 65s, the unemployed and those with no formal qualifications.

 

Fines collected triple

The fact that its annual report revealed the regulator had also collected three times the amount in fines in 18/19 compared to the previous year is also ringing alarm bells in the sector. Financial penalties rocketed from £69.9 million to £227.3m year-on-year whilst the number of enforcement cases open at March 31, 2019 was 31% higher than at the same point in 2018, at 650.

 

GAP insurance

The report also drew attention to its regulatory intervention on GAP insurance since prices reduced by 2-3% and add-on sales of the product dropped by 16-23% suggesting some customers did not want the product.

 

General insurance review

Retailers are also worried about issues raised by the FCA in its general insurance review earlier this year which questioned the value of products such as GAP and smart repair. High, or potentially excessive, levels of earnings for dealers was highlighted after it found 71% of the net premium in a GAP sale went to the dealership which sold it, and 54% of the net premium of a SMART repair insurance sale.

 

Senior managers and certification regime

From December the Financial Conduct Authority will extend the senior managers and certification regime to every FCA regulated firm. It sets a new standard of personal conduct for everyone involved in dealership sales of finance and insurance, at all levels, and enhanced senior management accountability.

 

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