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18 March 2019

FCA Motor Finance Report – what does it mean for the industry?

The FCA published its report on the motor finance industry on 4th March in which it looked to address unclear and excessive motor finance costs.

In it, the FCA said it is considering changes to the way in which commission works in the motor finance sector after uncovering serious concerns about the way in which lenders are choosing to reward car retailers and other credit brokers.

But what does this mean for the industry?

Our CEO and Compliance expert Ian Beardmore gives his take on it…

“So it has been a couple of weeks since the FCA published their final findings on the motor finance market, the general lack of noise from the motor finance sector captures my thoughts on the report perfectly, last Thursday 7th March I talked about this at the F&I Summit in Leicester to an audience of motor finance experts.

I don’t think there would be many individuals in the sector who would be surprised at the overall theme running though the report, the industry is brutally aware of it’s challenges and indeed has already gone some way to addressing them, the industry must now grab hold of the report and turn it into a positive in that the regulator has now outlined where it feels the short comings are.

Ever since the FCA took over regulation from the OFT in April 2014 I have been pushing the credit brokers to make sure they can demonstrate the suitability of the products they are offering to their customers, in a manner somewhat similar to that of a Demands & Needs statement as they would use if they were selling an insurance product.

As for commission well I think that speaks for itself, once again I believe the regulator will require all brokers to disclose the commission the are earning from the lender without any caveats, along with the FCA comments around commission reflecting the work required to process a finance deal I can see more fixed price commission models appearing. Whilst it’s still early days and the regulator will be putting together it’s proposed changes to the rules in due course the opportunity lies with the firms to make a start and get ahead of the game.”

For more information on this, please feel free to contact the team on 01423 522599 or email

By David Petty

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