Changes to car finance commission models could promote online car finance and better practise in showrooms, Paul Harrison, Auto Trader’s head of motor finance, has said.
The automotive industry is currently implementing the guidance on financial incentives as published last year by the Financial Conduct Authority (FCA).
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The FCA’s consumer credit rules state that commission paid to dealers must reflect the time and effort put into selling finance to consumers.
Harrison said: "Car finance providers are already amending incentive programmes to align them with the FCA’s rules and that’s a positive move for dealers. Fixed fees and standardised interest rates will help encourage best practice in showrooms and ensure that consumers are guided to suitable finance products."
The car trading company believes that the new rules could boost car finance.
Research conducted by Auto Trader found that only 15% of surveyed dealers currently displayed finance offers on their website, while 45% said they were likely to move their finance offers online.
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By GlobalData"Changes to incentive programmes will result in simpler and more transparent finance offers which, in turn, should translate more effectively to a dealers’ online showroom than has been possible previously. Given just how important finance is to dealer profitability, those dealers who transparently present their finance offers online will help reach a bigger audience and maximise their potential buyers," said Harrison.
