The recent debates over data protection in the car leasing market are preparing us for bigger debates elsewhere in the near future.
The NACFB’s own annual survey shows an overall rise in vehicle finance business written by our members over the past few years, from £228m in the period 2011-2012, up to £1.06bn in 2015-2016. It’s true that figures have declined since last year, which peaked at £1.24bn, and the number of deals per broker has also gone down. I’d like to address the decline in the past 12 months.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The decline since 2015 can in part be explained by car manufacturers and dealers realising the benefits (to them) of providing finance alongside their cars, both new and used. We’ve seen a resultant shift away from brokers and towards dealer-provided finance, in a period when new car sales have grown slightly. We’ve also seen a general embracing of FCA principal status, through which some brokers have simply been able to apply for appointed representative status through the FCA. In theory that has led to fewer independent brokers operating in the vehicle finance sector – although our own figures don’t show a statistically significant move either way on that. About one quarter of NACFB brokers are involved in arranging vehicle finance, and that’s been the case for a while.
Car manufacturers tend to be geared up to work directly with the vehicle driver and the owner because they are the same person. It’s a two-party relationship, so things can be kept simple. Add a middle-man to the mix – a leasing company, in this case – and the system can break down.
For instance if a car needs repairs, who should arrange the time and date? Should it be the driver, who will be inconvenienced, or the vehicle owner, who will pay the bill? More generally, given that data can have no legal ‘owner’ is it right that one company can profit from behaving as if it did own data? The NACFB shares its survey results and the data from our lead generation site, but in such a way that no data protection issues arise. This is not the same thing as fleet managers are able to do because increasingly they will be handling a massive volume of real time information. Data that indirectly identifies a driver can be considered personal data. Fleet managers are awash with such information.
BVRLA has been working on a “data principles document” that talks about what best practice looks like when treading in the murky waters of data protection. But this may be too little, too late, because the data protection rules are not drawn up by BVLRA, but by the rather more distant European Parliament which can change such essential first principles as the definition of what actually constitutes personal data.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIt is even difficult to get a consistent approach from car manufacturers, because there are so many of them. This is where taking a lead from the European Parliament could help. It will make it easier for manufacturers to work together, if this is a conversation they only need to have once to cover terms for the whole continent, rather than once for each country they export to.
Whenever an industry embraces new and relatively untested technology, it generally has to accept a little short-term pain for long-term gain – satnavs used to guide trusting drivers into rivers and down railway lines, but now the rough parts have been ironed out and we trust them. Still, if the leasing customer isn’t happy with his basic privacy, he’ll vote with his feet… by placing them on the accelerator of some other leasing company’s car, instead of yours.
Author Adam Tyler is CEO of the National Association of Commercial Finance Brokers
