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Looking after customers and delivering great service is a priority for every responsible dealer. That’s why it’s important to take note of the latest findings from the Financial Conduct Authority (FCA). 

Published in March, the report highlights how firms are supporting customers in vulnerable circumstances, showcasing examples of good practice and identifying where there’s room to improve.

The FCA defines a vulnerable customer as someone who, due to personal circumstances, is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care. Vulnerability can arise from various factors, including:

Health issues: Physical or mental health conditions that affect decision-making.

Life events: Such as bereavement, redundancy, or relationship breakdowns.

Financial difficulties: Limited income or debt problems.

Capability issues: Low literacy or numeracy skills, or limited digital literacy.

Recognising these factors is crucial in providing tailored support to your customers.

The FCA's guidance for businesses emphasises the importance of understanding and addressing the needs of vulnerable customers. Key recommendations include:

Staff training: Ensure all staff are trained to recognise signs of vulnerability and are equipped to handle such situations with empathy and professionalism.

Clear communication: Use simple, jargon-free language in all customer interactions. Offer information in various formats to cater to different needs, such as large print or audio.

Flexible processes: Adapt your sales and finance processes to accommodate customers who may need extra time or support. For dealerships, this could involve extended test drives or providing additional explanations of finance terms.

Feedback mechanisms: Implement systems to gather feedback from customers, particularly those who may have felt vulnerable during their experience. Use this feedback to improve your services.

Collaboration with support services: Establish connections with local support organisations that can assist customers facing specific challenges, such as debt advice services or mental health support.

Create a welcoming environment: Ensure your dealership is accessible to all customers, including those with mobility issues. Display clear signage and provide seating areas for those who may need to rest.

Offer personalised assistance: Assign a dedicated staff member to assist customers who may require additional support, ensuring they feel valued and understood.

Review sales practices: Regularly assess your sales techniques to ensure they are not pressuring customers into decisions they may not fully understand or afford.

Promote financial literacy: Provide resources that help customers understand the financial aspects of purchasing a vehicle, including explaining credit terms and loan options.

By implementing these practices, your dealership can not only comply with FCA guidelines but also build trust and loyalty among all customers, particularly those in vulnerable circumstances.

For more detailed guidance, refer to the FCA's full report on treating vulnerable customers fairly: FCA Guidance. For further support, you could also take a look at the Money Advice Trust’s vulnerability resources.

We have a whole host of motoring insights for you, take a look here now.

MotoNovo is committed to supporting dealers. If you need any further information or assistance, please feel free to reach out to your MotoNovo contact.

Remember, supporting those with vulnerabilities is not just about compliance; it's about doing the right thing and fostering a reputation for care and integrity with your customers.

Looking after customers and delivering great service is a priority for every responsible dealer. That’s why it’s important to take note of the latest findings from the Financial Conduct Authority (FCA).

Supporting vulnerable customers: A guide for dealers

By Debbie McKay, Distribution Director, MotoNovo Finance

The summer’s almost upon us. I think I speak for many of us when I say just how much I’m looking forward to a well-deserved holiday, after what’s been a typically boisterous first half of the year for us motor industry professionals. 

However, before we all get too carried away, a crucial deadline is coming up. By the 31st of July, all dealers need to have conducted an annual Consumer Duty health-check, as mandated by the FCA. 

In this article, we’ll tell you what needs to be done, why you’ve got to do it, and the potential ramifications of missing the deadline.

The FCA’s own online guidance (accessible here) is the best port of call, as it breaks down the requirements in handy dropdown menus. I strongly recommend dealers to read it. In summary:

Dealers need to analyse, test, understand and subsequently evidence the sorts of outcomes that customers receive. The breadth of how dealers might conduct this will vary on factors such as the size of the dealership, the types of clients it has, as well as the complexity of the products and services offered.

Consumer Duty requires a dealer’s board (or equivalent governing body) to review and approve an annual report on outcomes received by its customers. Dealers don’t need to send the report to the FCA, however, it must be available should the FCA request to see it. Please refer to the FCA’s online guidance (link above) for a comprehensive indication of what the board report must cover.

The FCA has stated that, naturally, smaller firms will have different capabilities depending on their resources. The FCA has also confirmed that from the 27th of February 2025, firms are no longer required to have a Consumer Duty champion on their board, although dealers can retain the role if they so wish.

Dealers must be able to identify vulnerable customers, understand their personal needs and meet those needs as much as reasonably possible.

As part of this, dealers must have systems and processes in place that encourage customers to make their individual needs apparent. Staff should also be supported with appropriate training and assistance to identify vulnerable customers, whether they interact with them face-to-face, over the phone or through digital channels.

The deadline for the health-check is, as already mentioned, the 31st of July. Don’t leave it to the last minute; if you haven’t already started the work, get going now as it’s exceedingly unlikely that you’ll be given an extension.

Every dealer should want customers to wax lyrical about the service they received. To recommend the dealership to friends and family, to leave a glowing review online, and, hopefully, to return as a repeat customer in the future.

Consumer Duty has presented challenges but it’s important to remember why it was introduced in the first place. It’s not designed to penalise; it’s there to ensure that dealers are successful and delivering the best possible outcomes for those they serve.

If dealers embrace the standards set out by Consumer Duty, they’ll be better able to optimise various aspects of their service such as customer support, clear communication, efficient and transparent sales processes and much more besides.

And what about if you forget or choose not to?

The FCA is unequivocal here. Any dealership not adhering to the rules will face severe consequences. The regulator has itself stated that in some cases, they’ll take robust action, such as interventions or investigations, along with possible disciplinary sanctions.

Putting aside the fundamental necessity from a regulatory standpoint, the impacts of not following Consumer Duty outcomes are pretty obvious.

Greater risk of reputational damage, poor online reviews, reduction in repeat business and word of mouth recognition, complaints and potential legal action... The list goes on.

Consumer duty adherence isn’t an optional nice-to-have. It’s absolutely essential; the dealers who continue to embrace it and prioritise good customer outcomes are the ones who’ll be most successful.

Every year, dealers are required to complete a Consumer Duty health-check, as set out by the Financial Conduct Authority (FCA). This isn’t just a regulatory requirement, it’s a key opportunity to ensure your business is consistently delivering good outcomes for customers. In this article, we’ll explain what the health-check involves, why it’s essential, and the potential consequences of falling short.

Dealers: don’t forget your annual Consumer Duty health-check

The rising cost of running a car has been a recurring theme for a long time now, and for EVs, we can’t overlook that electricity prices have also been increasing. For many car buyers, this additional cost has been an unwelcome burden.

However, something strange yet welcome is emerging; lower costs. It’s the sort of good news that’s always a pleasure to share with customers.

At the end of April last year, petrol prices hit 150.6p. Today, a litre of petrol costs, on average, 135.54p. The net result is that drivers are now saving 15p a litre when they fill up, or £8.28 for a full 55-litre family car tank. Encouragingly, these prices could drop further.

Falling oil prices are driving potential reductions in pump prices: today, a barrel of oil costs around $70, compared to above $80 in mid-January. The question is whether petrol retailers will pass on the savings they see as their storage bunkers are refilled with cheaper fuel. If they do, then the RAC estimates petrol could fall by around 6p a litre.

Furthermore, the Competition and Markets Authority (CMA), assigned by the Government to oversee competition in the sector, reported that petrol retailers overcharged drivers by £900 million in 2022 and £1.6 billion in 2023. This prompted the CMA to express concerns regarding the level of competition among fuel retailers. Its upcoming quarterly report is expected to be published soon, and it will be intriguing to observe how, if at all, this affects the situation.

For electric vehicle drivers, businesses, and homeowners, there is the curious prospect of falling electricity prices, just as the new Energy Price Cap came in on April 1st, bringing with it higher prices.

Thanks to the falling wholesale prices, people can now fix their utility prices, saving themselves 13%+ compared to the new Price Cap, according to MoneySavingExpert. For EV drivers, that’s a higher fall than has been seen in petrol prices over the last year.

The price certainty and instantly lower prices will be welcome, but the fact that utility providers are happy to offer such lower prices could point to further reductions in the coming months.

The overall situation is that whether a car is powered by petrol, diesel or electricity – those ‘fuelling’ costs are falling. For dealers, there could also be the opportunity to reduce operating utility costs as well.

Fuel and electricity costs are dropping, offering welcome relief for drivers, homeowners, and businesses. Discover what’s behind the fall and how to save more.

Good news - fuel and utility costs set to drop

When it comes to purchasing their next used car, the economic argument facing drivers should mean more and more people opt for a used EV over internal combustion engine (ICE) cars.

When it comes to purchase price, used EVs leave ICE models out in the cold

When looking at the costs for specific used EVs with their make/model internal combustion engine (ICE) equivalents, ICE models were, on average, £2,560 more expensive than the EVs, according to research carried out by Car Gurus in February. Additionally, those EVs had 18% fewer miles (equating to 3,252 miles) on average than comparable ICE models, providing drivers with an additional incentive.

Used EV running costs also come up trumps

In February, charging point manufacturer Andersons released data highlighting that the total cost of operating an electric vehicle was £1,154 per year, just under half the £2,316 cost of running a petrol car. Even if 8% of charging were at ultra-rapid motorway charging points, with average costs of 81p/kWh, EV drivers would still pay just under a quarter less than petrol drivers.

Car Expert has also, handily, examined servicing costs in isolation. The average yearly price for an EV is £232, but an equivalent petrol car costs £295. After five years of ownership, the gap is greater still, with EV servicing costing £3,857 compared to £5,514 for a petrol car.

ICE models winning on insurance costs, but for how long?

The only area where EVs fall short of their ICE counterparts at the moment is in insurance costs. January 2025 figures from Confused.com indicated that EV drivers are likely to pay £125.81 more per year, on average, compared to a petrol car driver. However, even here, Confused.com reports that EV insurance costs are on a downward trajectory, falling by 18% year-on-year in 2024. 

Whatever peoples’ views on EVs may be, if the economics favour them so markedly as this range of data suggests, more people will buy them.

Visit our News site to read more from MotoNovo

The move to used EVs

From April 1st, Vehicle Excise Duty (VED) rates (sometimes known as the road fund licence) will change, affecting all drivers in the UK. 

Battery Electric Vehicles (BEVs) and first-year VED rates will see prominent changes, but hybrid, petrol and diesel car owners will also be affected.  We hope this summary of the changes is helpful. 

New Cars - First Year VED Rates Increase  

A brand new car’s VED is based on emissions. BEVs registered after April 1st 2025 will now pay first-year VED for the first time, while petrol, hybrid and RDE2-compliant diesels will also see changes depending on their emissions. 

BEVs - Cars registered on or after April 1st 2025, will pay the first year VED for the first time at £10 until 2029-30  

All cars emitting between 1-50 g/km of CO2, which will include most plug-in hybrids (PHEVs), will see their first year VED bill rise to £110. Currently, hybrids in this band pay zero VED in the first year, while petrol and diesel cars pay £10.  

New cars emitting between 51-75g/km of CO2 will increase their VED rates from £30 (or £20 for hybrids) to £135.  

All other VED rates will double next year:

1-50g/km – £110 (previously £10)  

51-75g/km – £130 (previously £30)  

76-90g/km – £270 (previously £135)  

91-100g/km – £350 (previously £175)  

101-110g/km – £390 (previously £195)  

111-130g/km – £440 (previously £220)  

131-150g/km – £540 (previously £270)  

151-170g/km – £1360 (previously £680)  

171-190g/km – £2190 (previously £1095)  

191-225g/km – £3300 (previously £1650)  

226-255g/km – £4680 (previously £2340)  

255+g/km – £5490 (previously £2475) 

The expensive car supplement, currently paid on all petrol and diesel cars costing over £40K when new, rises from £410 to £425 and will be extended to all cars, including EVs registered on or after April 1st 2025. It is paid in addition to standard VED each year from the second to the sixth year a car is registered on the road  

Battery Electric Vehicles (BEVs) – note, cars and vans are different  

BEVs - Cars registered between April 1st 2017, and 31 March 2025 will pay the standard VED of £195 from April 1st 2025  

BEVs - Cars registered between March 1st 2001 and March 30th 2017 will now pay £20 VED a year  

Electric vans will now be charged £355 VED each year – the same rate as petrol and diesel light goods vehicles 

Standard VED Rates - all cars registered after April 1st 2017 

The standard VED rate of £195 applies to all cars registered after April 1st 2017, from their second year onwards. Previously, it was £190 for petrol/diesel cars, with a £10 discount for hybrids and free for electric cars. 

VED rates for cars registered between March 1st 2001, and March 31st  2017 - VED is based on fuel type and CO2 emissions. 

Cars registered between March 1st 2001, and March 31st 2017, are sorted into thirteen emission-based bands for VED.  

The most prominent change from April 1st is that cars with CO2 emissions of 0-100g/km will now pay £20 per year (previously, it was free). The rest of the bands have increased by between £5 and £25 or stayed the same, with the highest band for cars emitting over 255g/km now rising to £760. 

Cars and light goods vehicles registered before March 1st  2001 – VED is based on engine size 

Vehicle Excise Duty (VED) - Rates From April 1st 2025

All company car drivers are liable to Benefit-in-Kind (BiK) taxation. The Autumn Budget saw an announcement that the levels of this liability would change for all car types. These changes come into effect on April 6th, 2025 (the new tax year). 

BiK is calculated based on three criteria: 

The income tax band of the person getting the company car 

The P11D value of the car, which includes a car’s quoted list price plus all options/extras and delivery charges. It excludes road tax, first registration fees, and any dealer price discounting. If the car in question is second-hand, the P11D value still relates to its new value 

BiK percentage rate - take into account a car’s CO2 emissions, so the lowest polluting cars attract less tax, relative to more polluting ones of similar P11D value, and these are about to change 

Together, these three figures create the following formula: 

P11D value (£s) x BiK rate (%) x Income tax band (%) = Annual BiK tax payable 

From April 6th 2025, BiK rates will increase. All cars that emit less than 160g/km of CO2, including electric and hybrid cars, will get a 1% BiK rate increase. However, Plug-in hybrids (PHEVs) could see higher increases with a focus on their CO2 emissions rather than including zero-emission mileage, aligning them more closely with rates for internal combustion engine (ICE) vehicles. 

The CO2 emissions testing procedure for PHEVs is set to become much stricter, potentially pushing them into a higher BiK bracket.  All new PHEV models launched from January 1st, 2025, will be subject to the new testing rules, while existing models must be retested by December 31st, 2025, to remain compliant.  

Looking further ahead, the realignment of PHEVS with ICE cars is evident, and this move will significantly impact plug-in hybrid company car drivers. The appropriate percentage rates for vehicles that produce 1g to 50g CO2 per kilometre and can also operate on electric power within a certain range will be amended.  

Vehicles with CO2 emissions of 1g to 50g per kilometre will have appropriate percentages of 18% in 2028/29 and 19% in 2029/30. A PHEV capable of up to 69 miles of zero-emission driving will see a seven-percentage-point year-on-year increase in BIK. 

For the year ahead, click here to see the BiK Rates.

Changes to Benefit-in-Kind From April 6th 2025

Forecasting the future ‘residual value’ of cars has become a challenge for lenders and leasing companies over recent years as the marketplace shifts from internal combustion engine (ICE) cars to electric vehicles (EVs) at pace.

The trend for all fuel types has been one of declining residual values. Lower forecasted residual values, reflecting market trends, have resulted in rising monthly payments for PCP and leasing contracts. While the market dynamics are not yet stable, which requires greater consumer interest in EVs, some encouraging signs are emerging.

The latest trend data published by Autotrader for November revealed that the average price of a used petrol car was down 4.7% to £14,710, diesel cars were down 5.8% to £14,077, and electric vehicles were 11.7% lower at £26,390. The typical plug-in hybrid lost 10.5% year on year to £30,598.

Values are still falling, especially for EVs, but understanding the numbers in more detail is vital to seeing the broader picture.

The car parc for ICE cars is far more extensive than for EVs and has a broader age and price range, and consumer purchasing has trended towards older, cheaper cars in recent years. This is evidenced in the average prices. At least in part, EV and hybrid values are falling more sharply than ICE cars because the EV/hybrid parc is newer and more expensive – they have further to fall.

Falling values typically reflect supply exceeding demand, but this does not appear to be quite accurate on this occasion. In November, used cars sold two days quicker than in 2023, taking 31 days to leave forecourts. EVs sold even more quickly, at 28 days, with three-to-five-year-old EVs selling within 22 days on average.

The November demand numbers may indicate increased consumers’ confidence to switch to an EV. If this trend can be sustained, the imbalance between EVs and ICE cars will improve and used car values will establish greater consistency. Another factor that may benefit EVs is that the available parc of cars will be broader, including an increasing number of older, cheaper options.

The potential for this scenario is emerging. Autotrader’s latest used car forecast suggests the used car market will sustain the strong growth momentum seen over the last two years, rising from an estimated 7.61m sales in 2024 to around 7.70m in 2025.

One final observation: the increase in new EV sales has seen new diesel car sales collapse to under 6% of the market. This means there could be a shortage of new -3 diesel cars for people who want to buy such a car. This ‘final hurrah’ for newer used diesel cars could see their used car values increase.

·       https://www.autotraderinsight-blog.co.uk/auto-trader-insight-blog/used-car-prices-update

Used car values 2025

While consumer demand for used electric vehicles (EVs) has continued to increase, dealers have a crucial role in sustaining this trend, and this will be vital, especially for dealers retailing new – 5 stock, not least of all because newer used internal combustion engine (ICE) vehicles will continue to see supply falling, reflecting the growth in new EV sales.

The used ICE challenge for dealers is neatly summed up in the latest Cox Insight Quarterly Report* “a shortage of young ICE vehicles will likely elevate values and create fierce competition amongst dealers.”

On the other hand, the supply of N-5 EVs will only go one way, especially battery electric vehicles, as government benefit-in-kind benefits for hybrid cars start to be withdrawn.

Regardless of dealers’ personal views on EVs, they are moving rapidly to becoming the mainstream new car option for buyers, even if this is driven by government support. Thanks to de-fleeting cycles and salary sacrifice schemes, there will be ever more 2-5 age EVs and perhaps pre-registered EVs entering the used car landscape.

Embracing the transition to used EVs is one of those industry agility opportunity moments for dealers. Much of this will start with internal education so that a dealer’s team is equipped to help potential buyers make the switch.

In today’s social media-led world, where everyone can be an expert, dealers must get to grips with the truth about EVs, battery life, service and maintenance costs, range, recharging, charging, and more. A key message is that owning and driving an EV is different to an ICE car, but that typically, it is cheaper to run and very suitable for the average motorist who does under 7,00 miles a year, mainly on local journeys with occasional long-distance trips, especially if they have a home charger.

At MotoNovo, we will continue to publish validated independent insight about these factors to support the dealer network; we hope it will help dealers make the profitable transition to selling EVs in the months and years ahead.

*    https://www.coxautoinc.eu/news-and-insights/insights-quarterly-2025-predictions/

We explore why dealers need to make sure they are fully up to speed on information about EVs as consumer demand grows.

News - 2025