ONE in five dealers say FCA regulation is the single biggest challenge facing their business in 2014, according to a recent poll.
The survey, carried out by Close Motor Finance, quizzed more than 200 dealerships across the UK and found that concerns over compliance requirements were putting them at risk of losing their credit broker status.
The vast majority of those questioned in the survey (86 per cent) say that they plan to apply for full FCA authorisation when their interim permission expires.
For those not intending to apply, the biggest reason cited was a perceived lack of information or expertise to enable them to do so. Of those intending to apply, two fifths identified compliance procedures as an area of the application process they would require expert assistance with.
Paul Kaye, sales and marketing director of Close Motor Finance, says that the FCA legislation is a daunting reality for many of their dealer partners and that there has been, and will continue to be, much effort and change required to adapt to the new regulatory landscape.
‘We recognise that this may be an unsettling and worrying period for many of our partners, which is why Close Motor Finance is investing substantial time and cost into ensuring our account managers are trained in, and fully up to speed with, the new legislation which in turn will enable them to gently guide dealers through the process.’
He adds however that regulation need not be a burden and that, when managed properly, the changes forced by the new legislation can be leveraged for competitive gain.
‘Feedback from our survey indicates that the majority of application deadlines fall in the first quarter of 2015 so we would encourage dealerships to review and familiarise themselves with the guidance now so there are no nasty surprises down the line.
‘Our main message to dealers is to face the issue head on as missing the application window means ceasing to legally operate as a credit broker.’
Kaye says that the Close Motor Finance survey revealed that 70 per cent of dealers sell more than 20 vehicles on finance per year so credit related activities form a significant part of their business.
‘Failure to comply with the new rules could therefore cost dealers dearly in terms of lost customers and revenue. With careful planning in place there is no reason why this should happen.’