Financial Conduct Authority protections for used car buyers may ultimately lead to more expensive cars iVendi the automotive technology supplier has warned.
The company believes that as margins get squeezed through a combination of increased compliance cost and lower profits from finance and insurance sales, the cost will be passed onto consumers in terms of price hikes.
The forthcoming consumer rights bill may also make things harder for smaller dealers. Plans in the bill may force dealers to prepare cars to a higher standard which will take an element of choice out of the used market believed iVendi.
James Tew, director at iVendi said: "For example, at one extreme, you may have a manufacturer approved car from a franchise dealer that is in a condition and has a support package similar to a new car. At the other, you may have a local, independent dealer that sells a similar car with a much lower degree of preparation and offers no more protection than a three month warranty. The difference in price between these choices can easily be 20%."
By applying similar standards across the industry the risk is that the loss of margin for smaller dealers will be passed on to the consumer.
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