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|Transparency is crucial as the face of car finance changes|
|Thursday, 22 December 2016|
The motor industry is today urged to take a more proactive and dynamic approach to the changing face of car finance, with calls for greater transparency across the sector.
With consumers’ rights evolving too, the advice is loud and clear; car finance providers are encouraged to stay on top of the changes and remain visible and accessible.
Finance needs to be easy for the customer and regulation should focus on staging the sales process and drip-feeding information at appropriate times – not bombarding the customer with a multitude of mixed messages just to prove that they were fully informed.
Alphera has released this insight in the latest chapter of its thought-provoking research report. ‘Financing the Car of the Future,’ a visionary document that pulls together insight from across the automotive, retail, technology and finance sectors, warns the industry to take a more positive approach to changes in car finance.
Paul Bentley, Retail Operations Director at Lookers, has contributed to Chapter Two, which is titled ‘Credit: The changing landscape’. It examines the shifting landscape and the impact it is having on motorists and dealers.
He said: “Regulation continues to be an evolving process and we, like others, are working closely with the NFDA, FLA and FCA to establish standards and processes that consistently deliver good customer outcomes while remaining workable in the business environment. Transparency is crucial and the industry needs to work together.
“We need to continue to enhance our businesses in every way to meet the customers’ high expectations, it’s a bit like when you carry out home improvements to improve your quality of life, only in business if you want to rewire your house, you can’t just switch off the electricity! So, moving forward, it is all about ensuring change is at the right pace for our customers and our people to be able to embrace it.
“Technology plays a crucial part in this process, making the whole customer journey a lot more straightforward and personalised.”
The chapter explores the influence of the Consumer Rights Act 2015 – one of the biggest factors to impact the sector – and the many ways it has been good news for car buyers, allowing them greater protection. It also shares concerns from dealers about the consequences of the Act for business.
In addition, it highlights the growth of point-of-sale finance, driven by increasing levels of unsecured consumer borrowing, and further changes to the Financial Conduct Authority (FCA) guidelines.
Alphera’s thought-provoking report profiles the many opportunities for the motor finance sector over the coming decade. It brings together a variety of diverse voices from across academia, trade bodies, dealer networks, brokers and automotive suppliers, prompting far-reaching debate across the industry.
The latest chapter provides hard-hitting insight from industry experts and is the fourth instalment to be released. Previous chapters covered alternatively fuelled vehicles, emerging technologies and the UK’s transport revolution, and the impact of the internet on motor trade.
Gerry Kouris, ALPHERA’s Financial Service marketing manager, commented: “The automotive retail sector is changing as consumers’ rights evolve. This should be seen as an opportunity to firmly position car finance as transparent, accessible and customer-friendly.
“As an industry, we must listen to our customers and work with innovators to ensure the products we deliver in the future match the demands of an evolving financial marketplace, one that may be more tightly regulated in the months ahead.”
He added: “It is therefore vitally important for car finance providers to be aware of potential changes, rather than sitting back and waiting for them to happen. The release of this chapter provides essential insight, enabling them to always stay one step ahead.”
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