The 8th Annual Motor Finance Convention hosted by the
Finance and Leasing Association (FLA) saw delegates temper the
tonic of healthy market statistics with warnings over
recession and regulation.
Opening the one-day event yesterday, FLA
director general Stephen Sklaroff acknowledged a “busy year” for
the industry including new car sales rising by 9% and used cars by
6%, year-on-year.
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Sklaroff, however, warned that Office of Fair
Trading (OFT) guidance on industry regulation was still unclear,
with further guidance due that day which the FLA expects to respond
to next week.
“The government are listening but we’re not
out of the woods yet,” said Sklaroff.
Similarly, Chris Sutton, managing director of
Black Horse, Lloyd’s Banking Group’s financial arm, said there was
“good news” in the fall in bad debts this year and “still lots of
opportunity” in the sector but this was tempered by wider economic
fears. “Talk of another credit crunch is not fantasy,” he said.
Representing dealers, Simon Barrass of JCT600,
summed up his take on the market as “a very upbeat approach…
There’s a lack of consumer confidence but if you do your job right,
you can make some money and sell some cars.”
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By GlobalDataBarrass said it was “too easy to blame the
economy” and reminded delegates that far from being burdens,
compliance and investment in staff could be the pillar of a
successful business.
“If you don’t have a warm welcome when you
come on site, it’s all lost,” said Barrass. “Happy people will sell
more cars for us.”
Paul Harrop, national sales manager with
Mercedes-Benz Financial Services, presented an overview from the
fleet and business which contained many positive figures on volume,
market growth, cost and price since 2008.
Harrop said the market would remain strong
unless there was a second dip into recession and advised those at
the convention to distinguish the different markets for
manufacturers and lessors to help best match suppliers to
channels.
The positive attitude of Barrass and
encouraging numbers from Harrop were countered by Ruth Lea,
economic advisor and non-executive director at Arbuthnot Banking
Group, whose UK economic insight talk was, in her words, “rather
gloomy” but realistic.
Pointing to poor performance against
forecasts, low expectation, the squeeze on household consumption,
rising unemployment, credit reduction and the European crisis, Lea
said Chancellor George Osborne would “have to tackle some real
political sacred cows” to provide any fillip to SMEs.
James Baird, partner at Gateley LLP, laid out
the legal precedent for defining a credit broker and an
intermediary under the OFT. Baird agreed with the FLA that the
OFT’s attempt to apply a “one size fits all” regulatory framework
was, in present draft, “out of balance” and would not give a
“predictable or just” version of the law.
The Trading Standards Institute (TS) appealed
for dealers’ assistance in combating the illegal adjustment of car
mileages.
Nicki Rose, lead officer for banking and
credit with TS, recognised that complaints per car sold was only
0.05% but emphasised that dealers must increase their knowledge of
car finance provision to best help consumers’ understanding.
“Against turnover, complaints are minute but
the numbers themselves become oppressive,” Rose told delegates.
“One of the reasons we would look at working with companies is that
complaints still represent quite a bit of our time and your
time.”
The convention was concluded by Simon Rawle,
ombudsman for banking and credit, Financial Ombudsman Service
(FOS), by defending the service: “We are not consumer champions, we
sit in the middle.”
Rawle understood delegates’ frustration with
claims management companies and said the FOS made it clear to
consumers that using such a service did not guarantee success in a
claim, and was pragmatic about the application of its £500 case
fee.
Further coverage of the 8th Annual Motor Finance Convention
will appear in
December’s issue of
Motor Finance magazine.
