Last week, the Financial Conduct Authority (FCA) published its Q1 update as part of its exploratory work looking into the motor finance sector and the initial findings are positive.
BVRLA Chief Executive Gerry Keaney welcomed the report’s findings:
“We welcome the FCA’s interim report on motor finance and the chance to work constructively with the FCA in developing our industry-leading best practice programme.
“Supported by our self-regulatory code, training programme, governance regime and alternative dispute resolution service, BVRLA members have well established standards in place to ensure that customers are treated fairly.”
Speaking to the BVRLA, an FCA spokesperson working on the review said: “We have found that most of the recent growth in motor finance has been in lending to consumers with better credit scores. Arrears and default rates are generally low but have increased – particularly for consumers with lower credit scores. The largest lenders are adequately managing the risk of a severe fall in prices for used cars, but firms must regularly consider changes in the market.
“We will focus the remainder of our review on areas where we see continuing potential for harm to consumers - affordability checks, commission arrangements for dealers, and how firms deal with customers and provide information.
“We will complete our review and set out plans to deal with remaining concerns by the end of September.”