A recent Motor Finance survey has found that almost half of all car dealers are pushing ahead with their application for full FCA authorisation to sell finance once their interim permission has expired.
The survey found that 44.7% of dealers are opting to go for full authorisation while 36.8% will go for limited permission and 10.5% will go for variation of permission route. Dealers are concerned at how the new rules impact on their finance sales.
A third, said the rules would have a positive impact on their business. However another third of respondents thought the impact of the new rules would be negative.
It would suggest these dealers are perhaps concerned over falling levels of commission and sales of financial products. A huge concern for dealers is what will happen to their finance business if car manufacturers remove the Finance Deposit Allowance on new cars as customer incentive. This could prove damaging for a car dealers business.
Dealers do however differ on this issue. Almost half of dealers think it will “significantly” impact on their business while 26.3% think it will have a “marginal” impact. And 15.8% of respondents do not think it will have any impact at all.
The survey asked dealers whether they plan to use different sales channels – online and the showroom for example – to offer subsidised PCP or promotional APR offers from 1 October.
The response was generally negative with 42.1% of respondents saying they will not be creating new sales channels for finance while 10.5% said they will. Almost a third (26.3%) said they may set up new channels but were unsure and 21% did not know what they will do.
If you have just purchased a car and now looking for car insurance, be sure to get in touch.