The Finance & Leasing Association (FLA) has celebrated the success of its Specialist Automotive Finance (SAF) scheme to support comprehension of finance products sold in motor dealerships.
The scheme was praised at both a drinks reception at the House of Commons on 14 March, at which the revamped Financing Your Car website was launched, and at the FLA annual dinner on 26 February, at which it was confirmed 74% of the top 50 UK car dealershad now been approved under the scheme.
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Introducing the drinks reception, Lorely Burt, MP for Solihull, told attendees the FLA was working wel l at recovering the reputation offinance and putting "trust into the foreground for consumers, to the benefit of the industry". SAF, which had been well-received by the All-Party Parliamentary Group on Trading Standards in September 2011, was a "positive example to improve standards".
Also speaking at the reception, Robert Forrester, chief executive of dealer group Vertu Motors, said there were three benefits to the scheme: That it built trust which was otherwise "sadly missing" with customers; highlighted the importance of consumer protection to dealership employees; and demonstrated the knowledge required to sell finance.
"To run a professional business today without SAF is, frankly, not good for your business," said Forrester.
FSA ‘listening’
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By GlobalDataSpeaking at the Finance & Leasing Association (FLA) annual gala dinner, Martin Wheatley, managing director of the conduct business unit at the FSA and chief executivedesignate of the Financial Conduct Authority (FCA), confirmed the Authority was working with, and "listening" to, the FLA.
Wheatley emphasised the regulator was receptive to the needs of the industry and also acknowledged that such new and different types of credit markets would require further understanding while their regulation transfers to the FCA. The FCA will be created with the passing of the Financial Services Bill in spring, and subsume the work of the FSA while taking on many responsibilities of the Office of Fair Trading (OFT). The concern for the FLA had been whether the transfer would see regulation remain under the framework of the Consumer Credit Act (CCA) or change to the Financial Services & Markets Act, which the Association has feared will not account for the high level of intermediation in the market.
The majority of the CCA now looks likely to remain in place with the FLA "looking forward" to assisting in the review of select points, according to Doug Moody, FLA board member and sales and marketing manager at Mercedes-Benz Financial Services.
The FCA will now launch with a transition period for those businesses already registered with the OFT.
Stephen Sklaroff, director general of the FLA, called the recent approach to regulation "gratifying", although he remained cautious over whether the FCA would be ready to begin work in April 2014 as planned.
£76bn lent
Also speaking at the dinner, Philip Ross, chairman of the FLA and general manager at Honda Finance Europe, spoke of the "size and diversity" of consumer finance, a market worth £260bn, 40% of which was provided by non-banks and a quarter through retailintermediaries. Ross said almost all markets covered by the association membersh ip had shown growth in 2012, lending £76bn to businesses and consumers in total. He added consumer finance provided by FLA members had grown by 6% year-on-year, to almost £55bn, and accounted for just short of a third of the whole UK market.
This was driven by particularly strong growth in the point-ofsale markets: dealer motor finance grew by 22% and store instalment credit by 15%. New and used car finance volumes grew 14% to their highest level since the start of the credit crunch, up 18% and 10% respectively, adding up to total motor lending of £23bn, accounting for more than 1.9 million cars. Ross concluded such numbers showed "the economic importance of the FLA’s members".
Ross explained the FLA was also lobbying for greater action against complaint management companies and had undertaken a "root-and-branch" update of its Lending Code for members.
richard.brown@timetric.com
