By Martin Hill, MD, ITC Compliance
To say that that the automotive Finance and Insurance sector is in a state of flux would be an understatement. Recent developments such as:
- the focus on complaints regarding the Consumer Credit Discretionary Commission model as championed by Martin Lewis, and
- the changes to availability and sales of GAP Insurance from many insurers and product providers
These are just two of the issues that have been causing UK motor dealers to review their current position and plan for a less than certain future. Add in other regulatory focus areas such as Consumer Duty and it’s clear that there is much work for dealers to do. One thing that is certain is that the future F&I world will look very different to today.
At ITC, we have noticed that motor dealers are approaching these changes in a variety of ways. Some dealers have decided to immediately move away from certain F&I products altogether and to potentially forego potentially significant revenue streams that they were previously enjoying. In other cases, dealers have made a demonstrable effort to look at alternative products such as SMART and Tyre/Alloy that will allow for a consistent, defined value-added offering to still be presented to the consumer. Aside from continuing to provide a quality proposition to the consumer, it also provides an opportunity for dealers to maintain a level of F&I revenue that may otherwise be reduced or lost.
These challenges place demands on car dealers of all sizes – as we all know there is no light touch regime for smaller businesses compared to their larger counterparts. ITC Compliance has been providing a regulatory umbrella for motor dealers in the UK for nearly 20 years, and are trusted by some of the most respected names in the automotive sector. Although ITC has the largest Appointed Representative (AR) network in the UK for automotive financial services, we understand that there are also dealers that wish, for several reasons, to operate within their own FCA permissions.
However, many of these dealers are looking to ITC to provide the support infrastructure, oversight, audit and systems and controls that are all based on the recently introduced Consumer Duty model. We call this our Virtual AR regime, and it gives any dealer wishing to remain complaint in F&I activity but still wishing to retain their existing permissions.
At ITC Compliance our recommendation is that a dealer should not simply consider compliance systems and controls in isolation. It is equally as important to work with a compliance partner that has the capability to work with the dealer to create a fresh and renewed customer experience. Such initiatives can include new compliant and effective sales processes, or even advice on creating a robust post-sales contact strategy for customers.
There is no ‘on size fits all’ approach here, but ITC Compliance have the experience and track record to make sure that any dealer or Group can benefit from class leading technology driven compliance solutions.
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