As dealership across the UK look forward to re-opening in the weeks or months ahead, they might just find customers are taking more notice of dealer’s commission. At the same time, as people look to save money and spend more time researching online, the market might expect a greater awareness of interest rates and creditworthiness. The FCA’s newest rules are designed to make sure customers have better knowledge of dealers’ finance commissions and are ‘more likely to engage with what is on offer.’
The updated rule means dealers need to make sure customers are aware of the nature and existence of any commission, fee or other remuneration ahead of any finance agreement being finalised. The prominence required in disclosing the existence of commission will likely lead to more and more people asking ‘how much?’.
The right to access commission details is not new, but in light of the other changes and inevitable publicity, dealers should anticipate more requests for full commission disclosure.
The commission to be disclosed to customers must be accurate and if the precise amount isn’t known, it must reflect the likely amount. It must include any commission, fee or other remuneration payable to the dealer/group by the lender involved. If you’re a MotoNovo dealer, you can speak to your Account Manager if you need clarity on what that means for you.
We catch up with our Chief Risk Officer, Stephan Bothma, for his thoughts:
“Recent news headlines highlight the importance of dealers being prepared to respond to more customer queries about commission quickly and accurately as required by the regulator. Dealers must maintain a written evidence trail to prove that this information and broader commission disclosure requirements have been provided on a timely basis. Without this, defending any subsequent legal claims could be difficult.
“Commission disclosure is an ongoing risk. We know claims management companies have been increasingly active in motor finance. Compliance with the new commission disclosure rules and appropriate evidence is critical because accountability lies primarily with dealers and brokers”