How will the FCA’s new Consumer Duty affect dealerships?

On Wednesday 27th July 2022, the FCA finally confirmed their plans to introduce the ‘Consumer Duty’ which effectively requires firms to operate higher and clearer standards of communication with consumers in relation to the financial services they offer.

The Duty is due to go live on 31st July next year and will be based around an overarching ‘Consumer Principle’ which states that “a firm must act to deliver good outcomes for retail consumers”. The FCA have then gone on to specify the key focus areas, which are:

  1. The Products and services outcome
  2. The Price and value outcome
  3. The Consumer understanding outcome
  4. The Consumer support outcome

“’The Consumer Duty will lead to a major shift in financial services and will promote competition and growth based on high standards. As the Duty raises the bar for the firms we regulate, it will prevent some harm from happening and will make it easier for us to act quickly and assertively when we spot new problems.

Sheldon Mills, Executive Director of Consumers and Competition

With so many motor finance providers operating across the industry – each with their own individual product parameters and criteria – it can be challenging for dealer groups and their dealerships to ascertain which lender(s) is best suited to deliver the required result across each of these four categories. The key question is: “In the eyes of the FCA, are you offering the best possible outcomes for your customers”?

Ensuring the best possible customer outcomes

“Through an unrivalled range of facilities and expertise, DSG is exceptionally well placed to support the dealer network here, where some providers simply are not. DSG has proven, established solutions to ensure that both dealerships and their customers go on to receive the best possible outcomes.”

Mark Gow – Sales Director – DSG Finance

For products and services

  • With up to 20 separate prime and non-prime providers in our lender portfolio, we enable dealers to cater for every possible customer funding requirement
  • Our facilities accommodate virtually all customer credit profiles – providing even greater customer choice  

For price and value

By having impartial access to such a wide panel of lenders, DSG enables dealerships to effectively ‘compare the market’ in search of the lender who can offer their customer the best terms:

  1. Our point of sale system will rank several prime lenders’ PCP quotes in order of competitiveness
  2. Our non-prime process identifies which lender is prepared to offer the lowest APR and repayment based on the customer’s own individual credit profile

For Consumer understanding

  • We help simplify the motor finance process by offering a consistent, clear line of communication for both dealerships and customers – irrespective of the lender involved
  • Our Quality Assurance call at payout stage ensures customer satisfaction and understanding of their transaction. This recorded call then also provides dealerships with an additional layer of protection against any potential challenges from claims management companies in the future

For Consumer support

Our level of expertise is what separates DSG from other motor finance providers and we are often asked to liaise directly with the customer, on behalf of the dealership:

  1. Helping non-prime customers through the various options available to them
  2. Liaising with high net worth / high profile clients purchasing prestige vehicles
  3. Supporting business users through the process of funding LCVs

If you would like to find out more about how DSG could support you regarding the Consumer Duty – or any other area of your business, then we would like to invite you to contact us.

Mark Gow is Sales Director of DSG Finance.

How the FCA's new Consumer Duty will affect car dealers
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How the FCA's new Consumer Duty will affect car dealers
The FCA's new Consumer Duty which will fundamentally improve how car dealers serve finance consumers, and create challenges for some.
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DSG Finance
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