29 January 2014

Finance and Leasing Association director general Stephen Sklaroff renewed the organisation’s call on the FCA to get the upcoming changes to consumer finance regulations right so as not to de-rail the boom in new car registrations.

Speaking at the FLA’s annual motor finance convention, Mr Sklaroff said: “629,000 cars have been funded by FLA members this year and the value of PCPs has grown 43%, so we need to get the regulations right. We have been impressed by the way the FCA has listened to us, but hope they continue to listen as we have a lot to say.

“The timetable for the changes give us only four months and the FCA itself says this is very challenging.

“On April 1st it will be different to what’s gone before and guidance will be converted into rules. We face a situation where companies have to rethink their systems despite being compliant now.”

Mr Sklaroff highlighted the possibility that come April, there could be a “log-jam” when lenders go online to check intermediaries credentials – something the FCA says cannot be checked in advance, but is critical to allow trading to continue.

Meanwhile, figures released after the convention by the FLA  show growth of 16% in the number of consumer used cars bought using dealer finance in October 2013, compared with the same month in 2012, contributing to a rise of 14% over the last 12 months to almost 890,000. 

The rate of growth in the number of new cars bought by consumers using dealer finance was 4%, but volumes were up by 15% in the three months to October compared with the same period last year.

Commenting on the figures, Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The used car finance market has reported strong growth since April of this year. It’s on target to record its highest level of annual new business volumes in more than a decade.

“Growth in the consumer new car finance market was in line with the increase in private new car sales in October and follows a particularly strong performance in October 2012 when volumes increased by 40%. The percentage of private new car sales financed by FLA members in the twelve months to October 2013 remained steady at 74.2%.”

* Auto Retail Network is running a webinar in association with Black Horse to help retailers understand the changes. Sign-up free here.

Tags: Consumer Credit Act, FCA, FLA