11:20 am, October 16, 2020
Six dealerships had their Financial Conduct Authority permissions cancelled in September.
It removes their ability to offer consumer credit, meaning they can no longer sell vehicles on finance, which effectively limits them to just cash sales.
In addition, if they had a stocking facility with a finance house, they will have had that withdrawn as well.
The dealerships were:
E-Cars Trading Ltd, of Reading Road, Winnersh
Cars77 Ltd, of Coles Green Road, London NW2
AGK Cars and Son, of Wallace Court, Winsford Industrial Estate, Winsford
Affordable Cars of Essex Ltd, of Crow Lane, Romford
Peterborough Trade Centre Ltd, of Peterborough Road, Eye
Auto Planet London Ltd, of Cobbold Road, London E11
In each of its final notices, the FCA says that the company hasn’t been open or co-operated with the regulator.
It adds that they failed to ensure that their business affairs were carried out ‘in a sound and prudent manner’ and as such weren’t deemed to be ‘fit and proper’.
Paul Guy, co-founder and director of Automotive Compliance, told Car Dealer: ‘There has been a current trend of around 10 dealers per month since the beginning of the year of motor dealers having their FCA permissions cancelled.
‘September has seen a slight decrease in this trend, though this may just be due to Covid lockdown, when dealers were closed.
‘This is a clear message to motor dealers that the FCA have teeth and are reviewing dealers’ activities.’
He added: ‘Often, these cases are the consequences of a dealer having just not given their FCA authorisation the attention required.
‘It is sad to see this happen, as the consequences will usually close the business, brought about not only by the inability to offer finance for the sale of vehicles, which will greatly restrict the dealer’s business, but the inability to access stocking facilities and immediately repay any stocking loans in place.
‘These situations are quite easily avoided with a better understanding and focus from the dealer on their actual responsibilities.
‘We see independent and smaller owner-driver dealerships at potentially higher risk of this action from the FCA, as often their only source of compliance advice is from a local finance representative.
‘They are a great source of information but would concede themselves that they are not compliance experts.
‘Expert advice is available and not as expensive as can be perceived. We are working closely with the IMDA to minimise this risk within its membership.’
On a LinkedIn post, Guy said that being struck off was avoidable and could cost just £299 plus VAT per month – even less for IMDA members. ‘The alternative is much more expensive!!’ he writes.
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