Following the UK Court of Appeal judgment on Friday 25th October, we took the decision to pause new business from Monday 28th October while we worked to mitigate the legal implications to protect our dealers, brokers and customers.

We have now made the necessary adjustments to ensure the business can operate within the legal requirements set out in the judgment and are now open for new business in MotoNovo.

We do understand the pause to new business created challenges for you, and we thank you for your patience and support while we have been navigating the impact of the judgment. Dealer partners are encouraged to reach out to their account manager with any questions they may have during this time. Find out more here. 

Important update: We're back open for business

Interested in becoming a MotoNovo dealer? Get in touch today.

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Maintaining the physical security of a dealer’s premises and stock is an ongoing challenge, not least because appropriate risk mitigation processes may not be in place, or, more often, those well-intentioned actions might not always occur. 

This post highlights five actions that could help every dealer, regardless of size. Above all, we hope it prompts every dealer to review their business’ security. 

Catalytic Converter Thefts — there have been many articles about the frustrating impacts of such thefts. According to a BBC article on 24 June: “Catalytic converter thefts have been reduced to zero over the past seven months after handing out marking kits, a police force says”.  According to West Mercia Police, which distributed the kits and shared advice last November at a talk in Hereford attended by 200 people, catalytic converters could be marked with traceable liquid, and fitted locks were available. An online search suggests kits can be purchased for under £17. As well as security, it could be a nice added-value sales feature. 

Keys — this is obvious, but keeping keys out of sight and secure does not always happen in a sales or aftersales environment. A key safe and appropriate ‘use it every time’ procedure is crucial. Now add measures to avoid ‘keyless car theft’, which can take just 20-30 seconds. For these, any key cards/fobs must be kept safe inside a signal-blocking pouch of a Faraday Bag, which blocks a car key fob from transmitting its code to the vehicle. 

Building Security — locks. It might sound obvious, but installing suitable locks for your business premises is key. Insurance companies will often require certain lock types, such as a five-lever mortice deadlock that conforms to BS 3621. All doors must be locked every time a building is left unoccupied, and only doors that need to be opened must be left unlocked. Steel strips fitted to the door frame and around the lock can strengthen doors. The same closed-and-locked strategy also applies to windows whenever your business premises are empty. Security bars might be a valuable consideration for hidden or vulnerable window locations. Finally, in this section, an appropriate alarm system should be fitted; depending on potential risk, a monitored system may be suitable. Do check that your alarm system complies with your insurer’s terms. 

Perimeter Security - external walls or fences may be adequate, but additional steps such as security lighting, motion-detection lights or a high-quality CCTV system may be appropriate, recognising that while you can use CCTV to protect your property, you must follow data protection law. For more information on this, you can read the guidance on gov.uk. At a basic level, for out-of-sight areas or roof access, simple barbed wire can dissuade an opportunistic criminal. 

Staff — your staff are both a great asset and, while it may not be deliberate, a prominent risk to your business. Formal security processes and training are a must covering the physical security of the premises, vehicles (those for sale and those being serviced), stock, money handling (to include money laundering), vehicle demonstrations, sales release (to avoid fraud), security of phones and computers, and a lone working policy for any staff who may be on the premises alone. This is not an exhaustive list, but we hope it helps identify some areas to consider. 

For more on security at your dealership, read part one of our blog series looking at data security. 

In part two of our series, we're looking at the day-to-day security challenges for dealerships, with five steps to take. 

Security in your dealership: the importance of day to day security

July 31st is approaching rapidly, and with it comes the critical need to ensure timely compliance with the first Consumer Duty Annual Board reporting deadline.

The FCA has repeatedly reminded firms that complying with Consumer Duty and the Annual Board Report is "not a tick box" or "once and done" exercise. Firms must be able to provide evidence in their annual report that they’re continuously learning and improving outcomes for customers.

All in-scope firms (including FCA-regulated dealers) must demonstrate, through an Annual Board Report, why or how they think they comply with Principle 12 (deliver good outcomes for retail customers) and PRIN 2A of the FCA Handbook. The report will be used by the FCA to assess and evidence how firms have provided good outcomes for consumers under the Duty. The FCA has advised that it may ask firms for a copy of its Board report.

To comply with the requirements, each firm must provide a report to its governing body (typically its board of directors) setting out the results it has collated over the year in monitoring the outcomes retail customers are experiencing from its products and services.

The FCA’s four outcomes and the associated supporting evidence should be reflected in the report:

Whether customers are being sold products that meet their needs

Whether the products being purchased provide fair value

Whether customers are being equipped with the correct information to make informed decisions

Whether customers are receiving the support they need

The report should explain any risks arising that would prevent the firm from complying with the Duty and whether any remedial actions are required. The report should include a focus on vulnerable customers.

The firm’s appointed Board Consumer Duty Champion must then:

Review and approve the firm's report on the outcomes being received by retail customers.

Confirm whether it is satisfied that the firm is complying with its obligations under Principle 12 and PRIN 2A; and

Assess whether the firm's future business strategy is consistent with its obligations under Principle 12 and PRIN 2A.

The FCA has not provided a template board report, so it’s up to firms to prepare a report proportionate to the risk they pose to customers and the market, but a one-pager is unlikely to be sufficient! However, the FCA has given a steer on what it will expect to see in the report namely: an Executive summary; overview of any outcome testing that has taken place, a focus on vulnerable customers and future strategy.

Our best guidance is to work with your compliance support to ensure you are on track and to put its importance in focus.

With the July 31st Consumer Duty Annual Board reporting deadline around the corner, all FCA regulated dealers need to ensure they're prepared and ready.

All FCA regulated dealers must prepare for their Consumer Duty Annual Board Report

The supply of used battery electric vehicles (BEVs) continues to rise as new sales increase and prices become more affordable. While the purchase price of BEVs remains an issue for some car buyers, the reality is that price parity with petrol/diesel equivalents continues to emerge. It is a situation that is only likely to gain further momentum as new petrol and especially diesel sales fall. 

Many people are interested in switching to a BEV, which is a positive step; if that step can be more affordable than staying with a petrol/diesel car, then many more people will surely make the move. It may well be that cost moves from a barrier to buying a used BEV, to the primary reason. For dealers, spotting this coming tipping point will be important.  

However, price is not the only barrier to buying a BEV for some people. In this post, we look at how dealers can address the other critical potential obstacles customers may have when purchasing a BEV. 

Range and charging are significant issues for many customers, and much of this centres on perception rather than reality. 

The average commuting distance in the UK is a little under 20 miles, and just 14% of commuters travel over 42 miles a day. Not only will pretty much any BEV meet the needs of the 99% of people whose car journeys are under 100 miles, but anyone with a home charger will also find the cost of their travel reduced compared to a comparable ICE (internal combustion engine) car, and they will not need to spend time locating or using a petrol station. 

It currently costs around £20.29 to drive 150 miles at 50MPG in a petrol-powered Ford Fiesta, and it costs £8.94 to drive the same distance in a Nissan Leaf that has been charged up at home at 22.39p per unit; this current and compelling picture was painted on June 18th this year by clean energy specialists Good Energy.  

US telematics provider Geotab analysed data from over 6,300 fleet and private BEVs of different makes and models and found that the typical BEV battery degrades by 2.3% annually. 

Translated into real-world terms, an EV with a working range of 240km (150 miles) would lose just 27km (17 miles) of range over five years. 

The final doubts about the viability of BEVs for most motorists sometimes lie with dealers. The only observation we can add is that in a few short years, as the new car market becomes dominated by BEVS, the used market will follow, and appreciating reality vs perception may help generate more sales. 

Take a look as we explore BEV cars and how customers feel about becoming more sustainable.

Sustainability: helping customers in their BEV buying

Part 1: simple cyber security for every dealer

Protecting your dealership from fraud, money laundering, identity theft, and cyber crime are some security issues that should be on the radar for all dealerships, regardless of their size, and that’s not even touching on the physical security of your stock and premises. 

In a series of high-level posts, this dealer security series aims to provide best practice guidance and introduce you to ways in which MotoNovo is working to help you. 

In June, a cyber attack on CDK Global affected around 15,000 dealerships across North America. With their DMS system and other platforms, including their F&I system, all down, dealers had to revert to pen and paper to keep their business going for over a fortnight. On 22 June, according to the journal Fortune, the company planned to pay the hackers a ransom, believed to amount to tens of millions of dollars. 

The personal information of millions of customers is likely to have been at the heart of the hack. This led CDK to issue an urgent warning, cautioning people about ‘bad actors’ posing as employees during phone calls to obtain credit card details and access to their accounts. 

Dealers must not be too busy to ignore cyber security 

We recognise that the time needed to consider and address security threats could also be buying and selling time. However, it is essential to recognise that a security outage could halt your business and risk its reputation. If you don’t have the in-house expertise, it is encouraged that you to find a suitable expert to help. 

The government’s National Cyber Security Centre (NCSC) is a helpful resource. Below are some useful tips, courtesy of the Open Government Licence.   

While not extensive, these are seven practical steps even the smallest dealer should take as a minimum to secure their business: 

A one-page checklist – as a starting point, download the government’s NCSC’s Cyber Security Action Guide for Small Businesses, accessible here. This will be very useful if you are looking for a simple one-page checklist of action points. 

Data security and back-up – create a rigorous daily process for securing (encrypting, password-protecting) all your critical data, such as customer details, quotes, orders, and payment details. Keep the backup separate from a computer on a secured hard drive or in the cloud. 

Hardware security – ensure computers, tablets, and smartphones are kept physically and digitally secure and password protected and use current security updates for all software and apps.   

Passwords – ensure every online account related to your business has a unique, strong password, with 2-step verification for critical folders/files. Using a business-grade password manager can help maintain strong passwords that are not repeated across devices. Never write passwords down. 

Training – regular cyber security training for employees can reduce the risk of phishing and other social engineering attacks. Employees should be taught to recognise suspicious emails and verify identities before sharing sensitive information; here is a free resource that can help. 

Cyber security Insurance – designed to protect your business from threats like data breaches or malicious cyber hacks on business computer systems. The right cyber security insurance can provide crucial support to help your business stay afloat. 

For more on security at your dealership, read part two of our blog series looking at data security. 

In part one of our series, we're looking at the ways that you can protect your dealership from cybersecurity challenges. 

Security in your dealership: protecting your business and customers

In launching the Consumer Duty on July 31st 2023, for open products and services, the Financial Conduct Authority (FCA) set out to raise the bar for financial services with what it declared were ‘higher and clearer standards of consumer protection.’ At its heart was the new Consumer Principle, which required firms “to act to deliver good outcomes for retail customers”.  These are a few simple words to say/write, but in action, they are a far more complicated proposition to deliver and evidence without significant process and cultural change for many in the financial services sector.

Ahead of the Consumer Duty launch, MotoNovo completed a significant volume of work to prepare itself and to help its distributor (dealer/broker) network to ensure they understood and were ready for the launch.

A dedicated series of Consumer Duty videos designed for distributors provided an overview of the new regulation's requirements, shared best practices and outlined the crucially important identification and care rules for potentially vulnerable customers.

Closer to launch, our highly trained business development team delivered a very well-received Dealer Readiness Assessment tool, which helped dealers crystalise areas that they needed to focus on to prepare for the initial launch.

I say ‘initial launch’ because it was always clear that for all of us in motor finance, July 31st, 2023, was the start of the Consumer Duty process, not the end. The regulator was clear that it expected compliance with it to be something that would evolve or to quote the FCA’s Nisha Arora in a speech on November 1st, the Consumer Duty was “not once and done.”

While the regulator has recognised that many financial services firms have made great progress on the Duty, in a speech in February, the FCA’s Sheldon Mills noted, “there is still much room for improvement.” Areas of improvement identified by the regulator have included evidencing fair value and good customer outcomes and supporting vulnerable consumers.

Undoubtedly, we can all expect further changes in how we operate to fulfil the Consumer Duty requirements across motor finance. As a lender, we must keep improving our products from a price and value perspective. For our dealers and brokers, the need to stay focused on measured customer outcomes cannot be underestimated. Customer reviews alone will not be enough. Broader data insights will be needed to include areas such as product performance data, complaints, customer feedback, and reviews.

At MotoNovo, we remain committed to our partnership principle. We will continue to work side by side with our partners to ensure they understand the evolving regulatory position and share insights and tools to help.

A year on from the launch of the Consumer Duty – FCA webinar

In the spirit of us all being in this together, if F&I is important to your business, I’d encourage the dealer and broker community to join an FCA webinar on July 31st 2024. The live event will enable us to hear first-hand the regulator’s insights and those of the Financial Ombudsman on the Consumer Duty. It will also be possible to raise any questions. The webinar will focus on: 

The impact the Duty has had in its first year 

Examples of good practices and areas for improvement 

The FCA’s priorities for the year ahead 

Nearly one year on, Distributor Director, Debbie McKay, is looking back on the journey to Consumer Duty.

News - July 2024

Security in your dealership: the importance of day to day security

All FCA regulated dealers must prepare for their Consumer Duty Annual Board Report

Sustainability: helping customers in their BEV buying

Security in your dealership: protecting your business and customers

Consumer Duty: one year on

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