The Covid-19 pandemic has placed new pressures on the motor finance industry, forcing finance and insurance (F&I) specialists to quickly adapt to a new landscape. Motor finance customers now require more support than ever, with vehicle F&I products sold with complete transparency.
It has never been more important for F&I sales specialists to stay up to date with guidance from the Financial Conduct Authority (FCA) and the Finance and Leasing Association (FLA). In a time of constant change, dealers need to ensure they remain fully competent and compliant in the sale of F&I products. Despite the challenges caused by Covid-19, salespeople and lenders are still bound by regulations to inform and educate customers when selling F&I products.
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Customer support and guidance has never been more important. There has been a subtle shift in the role of dealer staff in recent years – they have become highly professional enablers to a sale; rather than playing the ‘traditional’ salesperson role and stereotypically, persuading an unsuspecting customer to take an inappropriate vehicle, accessory or finance product.
Salespeople are now considered to be relationship managers, providing the best service to customers to build long-term relationships and ensure positive customer outcomes with every sale. This new attitude is increasingly ingrained into dealer culture, and is much more likely to yield long-term profitability and sustainability for the business.
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This level of professionalism and competency within the industry is often misunderstood by the public, however. Anecdotally, it seems perceptions of dealers, held by many customers have not caught up with the reality of new skill sets and standards of professional behaviour of F&I salespeople.
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By GlobalDataIt is therefore vital that F&I salespeople demonstrate to customers that they are open and transparent about products, and only recommend the most suitable options. Adherence to industry guidance and regulations must be apparent in everything they do. Dealers will be able to build trust with their customers and retain them for years to come if they make recommendations that put customers’ needs first.
In 2018, Alphera Financial Services supported the Institute of the Motor Industry (IMI) as they launched the first accreditation scheme for selling car finance. This scheme helps to address public scrutiny of motor finance specialists and ensure the highest minimum standards regarding the sale of car F&I products.
The accreditation pathway and the training that Alphera delivers to support it, compliments established Specialist Automotive Finance programmes from the FLA. It has been designed to enable sales staff to develop confidence in their skills and knowledge through practical, non-academic programmes and assessments. The scheme provides a platform for self-regulation, supporting compliance with FCA rules and guidelines, and renewing customer confidence in guidance they receive.
Through the scheme, accredited professionals are also added to a publicly searchable database of F&I-accredited individuals, created by the IMI. This further increases trust and empowers the customer, enabling them to find out whether their sales specialist is best-qualified to sell car finance. Schemes that demonstrate competence in the sale of F&I products are more important now than ever.
Post-lockdown car finance – a question of distance-selling
With little end in sight to many of the social distancing measures put in place following the coronavirus outbreak, dealers have been reacting quickly as customers adapt to their ‘new normal’.
Many people who used to commute via train may decide that a car is now a preferable option. For millions of others, their annual mileage may have fallen dramatically, or – for key workers – increased almost overnight as they turn to their car rather than public transport. It is therefore even more important for dealers to truly understand their customers’ situations and changing or changed needs.
This in itself is another hurdle for dealers, with social distancing measures meaning some customers may be anxious about visiting showrooms again. Retailers have made huge efforts to demonstrate their showroom hygiene measures, but dealers can also draw on digital tools to maintain relationships and dialogue with buyers.
It is unreasonable to expect buyers to visit a dealership just to negotiate a finance agreement when digital tools allow this to take place remotely. For example, Alphera’s e-ID, e-signature, eDocumentation and Autopayout platforms for dealers enable customers to complete much of the process remotely.
This might be a significant change to a dealer’s previous sales processes however and may result in the agreement being ‘distance sold’. It is therefore important for dealers to know what constitutes a ‘distance sale’, and what this means in terms of their responsibilities to the customer and the lender. Dealers must use the right documentation and processes when selling vehicle finance remotely, as these can differ from the usual processes in the dealership and mistakes here can result in problems further down the line.
Distance selling regulations have been in place for many years now, and form part of the normal training pathway for F&I sales specialists. For many retailers, a refresher for staff should be all that is required.
By Spencer Halil, director ALPHERA Financial services
