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Changes to the Appointed Representative (AR) model for financial services, including dealer F&I will see AR Principals expected to monitor, oversee and manage their dealers better, demonstrating appropriate oversight and control of their ARs' activities.

At the same time, the FCA is clear that they want Principals that can demonstrate appropriate oversight and control of their activities and which are financially stable. The FCA plans to announce new final rules in H1.

On December 3rd 2021, the FCA published a press release, "FCA proposes stronger requirements on oversight of appointed representatives." It heralded the start of a consultation on the future of the AR regime that closed in early March. The FCA plans to announce new final rules in H1 .

The FCA's press release announcing changes to the AR regime did not pull any punches. The regulator identified a wide range of harm across all the sectors where firms have ARs. At the heart of the issue, the FCA pointed to principals not performing sufficient due diligence before appointing an AR or inadequate oversight and control after an AR has been appointed.

Typically, any changes will impact dealers AR status with regard to added value insurance services, although some dealers are also Ars for their finance activity.

Reviewing the FCA’s documentation on the issue, the regulator has been clear that complaints involving AR Principals exceeded non-principals; the situation was particularly clear where principals were of a smaller scale. The issue for the FCA is that smaller Principals can lack the resources to undertake their responsibilities effectively. In short, too often oversight has been too "light-touch."

There can be little question that the proposals will require significantly more time, effort and cost for dealers. It will also mean that Principals, as the regulator recognises, will require sufficient resources to maintain the "adequate" controls required. Indeed the FCA references the need for Principals to have the necessary people, processes, technology, facilities and information and, by implication, financial backing to oversee the AR's activities and potential liabilities. It does look like more regulator change is on the cards.

Changes to the Appointed Representative (AR) model are on the horizon with the FCA setting out the need for clear principles to be put in place. Find out what this means for dealerships. 


New standard for appointed representative (AR) status ahead

If ever there was a day to get onto a motorcycle, World Motorcycle Day and the summer solstice, marking  the longest day of the year, feels like the perfect opportunity, (weather permitting of course!). From the 1860 original steam powered model to the now electric powered bikes, what does the future of the motorcycle industry hold?

On June 17th, the UK Government has announced £43.7M joint industry and government funding to support the development of the latest green automotive technology – welcome back Norton.

 Two initial projects were awarded funding through the Advanced Propulsion Centre (APC) Collaborative Research and Development competition, which supports the development of innovative low carbon automotive technology. The first of these centres upon the development of an electric motorbike and centres on an iconic British motorbike brand, Norton.

Project Zero Emission Norton, Solihull, West Midlands is a £17.2 million (£8.5m funding through the APC) project that aims to develop an electric motorbike that delivers a high level of race performance and touring range, not only enhancing workforce capabilities and securing local jobs, but helping to strengthen the UK’s competitive supply chain

Norton is not the only famous motoring brand on-board with the project. Delta Cosworth – the electric powertrain division of the famous Midlands engine builder – will be developing the essential battery pack. They will be joined by WMG, University of Warwick, who have previously collaborated with Norton on a TT Zero race bike. They will take on battery technology, modelling and toolchain development.

As inflation bites, the small scooter market grows

The rising cost of commuting and the appeal of the flexibility of two-wheel motorised transport have combined to help a particular motorcycle market segment.

Smaller capacity scooter registrations remain buoyant, with a 20.4% year on year increase in volumes of  traditional petrol and fully electric two wheelers.

For those suffering acronym overload, Clear Air Zones (CAZs) and Low Emission Zones’ (LEZs) are dedicated areas, largely urban, where the aim is to keep vehicles that cause a lot of polluting emissions out.

High polluting vehicles are not forbidden from entering these zones, except in Scottish cities. However to access the area, drivers may have to pay a daily charge when driving in the zone; except in Scotland where the daily fee is replaced by a fine.

Not all PTWs are exempt from these news zones and there is the challenge that these zones do not operate to a consistent standard, which includes the reality that some may attract fees/fines for polluting vehicles, others may not.

The general rule is that motorcycles need to at least meet Euro 3 emissions standards for NOx. Most motorcycles are likely to meet this standard because manufacturers have been reducing emissions and the Euro 3 standard came into force in 2007. Generally, Euro 3 engines registered with the DVLA after July 2007 fall into this category. However, there are some cross/over exceptions as the ULEZ rules are enforced on declared emissions of the vehicle as opposed to the age. 

Electric motorcycles emit no NOx or CO2 from the tailpipe and therefore emit no emissions and are completely exempt from CAZs/LEZs currently.

Motorcycles built more than 40 years ago and classified in the historic vehicle tax class then you will be exempt from ULEZ charges. 

Whether it's on World Motorcycle Day or any other day, there’s something that can’t be beaten about being on two wheels!

For #WorldMotorcycleDay, we're looking into the future of the motorcycle industry.

The future of the motorcycle industry

Inflation hits a 40-year high of 9.1% and is set to hit 11% later this year according to the Bank of England’s forecast after raising interest rates to a 13-year high of 1.25%

The Financial Conduct Authority (FCA) writes to lenders, reminding them to support customers in need and ensure their approach to taking on new borrowers takes account of the financial pressure they may face and the impact on their expenditure.

Spiralling inflation, which is set to continue into the Autumn with utility prices set to rise, saw affirmative action by both the Bank of England and FCA designed to address the rising cost of living and support people struggling to meet their payments.

The FCA has written to more than 3,500 lenders stressing the need to support people. As well as helping existing customers, the regulator highlighted the importance of ensuring that lending decisions take account of the financial pressure people may face due to inflation, which is expected to keep rising.

While the Bank of England interest rate increased to a 13-year high of 1.25%, the rate is widely expected to increase further. While such a move may not impact existing fixed-rate finance agreements, the cost of finance for new borrowers is likely to rise as money costs rise. At the same time, as people's disposable incomes are eroded by rising costs, default levels are set to increase, something the Bank of England has already forecast for unsecured loans.

Commenting on the recent developments, Chris Rowthorn, Director of Motor Sales Operations at MotoNovo Finance reflects;

"The speed and level of inflation is a new phenomenon for many people. It is creating hardship that looks to get worse in the months ahead. As a lender, we are committed to helping existing customers impacted by this trend. At the same time, as the FCA reminder directs, we and all responsible lenders must ensure that essential affordability checking takes account of the accelerating cost of living.

Classically, the 'secure' nature of HP and PCP finance is impacted less than unsecured loans by the type of economic 'shock' that we are witnessing, as seen during the pandemic, but nor are we immune from it. At MotoNovo, we are committed to growth and delivering good outcomes for our customers and dealers alike. Against a deteriorating economic backdrop, we will seek to collaborate even more closely with our dealers to create affordable acceptances and in this respect our unique risk-based pricing model, MotoRate’s flexibility is likely to be invaluable."

Press release issued by MotoNovo Finance, June 2022

With living costs set to rise, the FCA have called for support from banks and lenders to support people with payments. Hear more from Director of Motor Sales Operations, Chris Rowthorn. 


June 16th rising interest rate, inflation forecast and FCA calls for care

The latest Bank of England figures show the annual growth rate of lending to SMEs at a record low

MotoNovo increased lending to SMEs seeking their next car by 55% over the last year; with lending volumes to corporate customers increasing YoY by 50% overall

MotoNovo’s growth in lending to SMEs is in stark contrast to the broader picture reported by the Federation of Small Business (FSB), which has said recently that SME finance applications had plummeted to the lowest level on record1. A situation that saw the FSB’s national chair, Martin McTague, noting that; “Lenders pulling up the drawbridge for small firms will threaten our already faltering economic recovery.”

MotoNovo, which has enhanced its business finance capability, matching this with a desire to increase market share in the new and used vehicle financing sector, has aligned its ambition with action;

Over the last 12 months, MotoNovo has delivered;

50% growth in lending volumes to corporate customers

55% growth in lending volumes to SMEs to purchase cars

In total, the business has helped SMEs by providing well over £100M of vehicle finance over the last year and as MotoNovo’s Commercial Director Debbie McKay concludes, the business plans to keep growing even in a more challenging market;

“We remain very ambitious for ourselves and our dealers in terms of SME lending. The FSB’s research on SME borrowing notes that while 61% of businesses seeking funding sought traditional overdraft and loan products, only 25% applied for asset-based finance, a definition that included invoice finance. 

“While not immune from the prevailing economic conditions, dealer finance can be very competitive and has the advantage of being ‘secure’, which typically helps acceptance levels. Dealer finance is also quick and easy to set up and frees up other borrowing. We want our dealers and their customers to appreciate these points because our dealer finance is very much open to helping SMEs.”

Press release Issued by MotoNovo Finance, June 2022

Enhancing our business finance capability and increasing lending to SMEs by 55% over the last year, hear from Commercial Director of Motor Sales, Debbie McKay, on our plans to grow in the ever challenging market.

News - July 2022

New standard for appointed representative (AR) status ahead

The future of the motorcycle industry

June 16th rising interest rate, inflation forecast and FCA calls for care

MotoNovo increased vehicle lending for SMEs

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