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FCA Review how motor dealerships and garages provide finance for vehicles.

Monday 7th August 2017 10:35:26

The FCA ( Financial Conduct Authority ) took over from the FSA ( Financial Services Authority ) and made it their mission to review the way in which Financial Services are provided in the UK. 


While their role we are sure will be never ending the are making real head way in the world of motor dealer finance. Please remember that the FCA is the governing body and any dealership or organisation who ignores their guidelines does so at their own risk, ultimately they can stop companies from being able to provide finance and or promote the sale of insurance policies. 


With margins being squeezed on metal profit finance and insurance departments are more important that ever. So getting this department working like a well oiled machine is not something that any dealer group or garage can ignore. 


During the review on how motor finance is provided it is reported that the FCA said that the key areas to focus on were 


  • Making sure that garages and dealerships where lending in a fair way. Unlike when you apply for say a bank loan or a mortgage currently there is normally little or no affordability testing when you apply for car finance. 

  • The dreaded commission question! We are sure that no one is under any illusion that when you take out a form of finance ( unless subsided ) normally the garage or dealership will earn a commission. With different finance companies and providers offering different rates of commission there could potentially be a conflict of interest. In s much as you could be offered one package over another simply because the garage is being encouraged to promote a style of finance as it has increased commission potential. 

  • Are customers and car buyers genuinely being supplied with all the information that they need to know to be able to make genuine real choices about the potential risks involved when committing to the finance package.  

  • Do garages and car dealerships making sure that car buyers are informed about the risk that potential falls in used car prices could cause.


The FCA has a difficult role as they are their to primarily make sure that any financial service you buy or agree to does what is says it should. It should also perform the way you expect it to for the life of the investment or policy. They also have a role to play in not only by protecting customers but also improving the standing of the industry as well as encouraging competition. For further information we would recommend visiting their Website.


This we think is an amazing thing for both consumers and garages as even though we are sure that there will be transitional issues when the FCA finalise their review and implement any changes they consider necessary it will mean that customers will get genuine information which is fair and encourage better deals.


Why not let us know what you think about the FCA motor finance review.


While only time will tell we think and hope that the FCA review will have a positive impact on the way in which car finance is sold and promoted?

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