Alphera is to change its pricing structure for dealers and its broker partners across the UK from the 1st of January by eliminating customer fees, apart from a nominal option-to purchase payment.
The BMW owned independent lender will also drop volume bonuses to instead pay a fixed commission at a capped rate, regardless of the product, term or age of the vehicle.
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Andy Gruber, director at Alphera, said: "In developing our new pricing structure, we basically focused on three key pillars: it should ensure the best outcome for customers, it should be simple and it should allow dealers to maintain their levels of profitability. Based on the overwhelmingly positive market feedback we’ve received in the trial stages, I am pleased to confirm that our new pricing model delivers on all three objectives."
He said: "As we enter 2015 and the first full year of FCA authorisation, it is vital that the motor retail sector shows that it has listened to the regulator and is making the necessary changes to demonstrate that the customer is at the heart of all business decision-making.
"We’ve been working on evolutions to our business model for a number of years now in order to boost retention and customer loyalty. However, with increasing clarity about what is – and is not – acceptable, we felt the time was right to put our stake in the ground and demonstrate our commitment to treating the customer fairly."
In support of the new pricing structure, Alphera has also revealed a series of dealer and broker support products to be released over the coming months, including customer retention tools, relationship management support and an ongoing series of regulatory best practise workshops.
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By GlobalDataGruber told Motor Finance the changes follow the same basic principles as those of the new BMW FS business plan, which was announced in November.
Gruber said: "Alphera, however, operates in a different market place to that of BMW Financial Services, working with a huge variety of partners, ranging from independent used car dealers to large, national PLCs. This results in the need for some flexibility with regards to the maximum rate."
