iVendi, the car finance technology provider, has joined calls for dealerships to check their finance sales compliance ahead of the introduction of Financial Conduct Authority (FCA) rule changes in 2014.

The advice follows on from warnings that dealers need to check their credit licenses, currently held from the Office of Fair Trading, before applying for an FCA license. Among those that have expressed their concerns to dealers have been BMW owned Alphera and the Finance and Leasing Association (FLA).

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Now iVendi has added to that call.

James Tew, director at Ivendi, said: "It’s imperative to ensure dealers have the correct categories on their existing consumer credit licence before doing so. Most lenders are recommending C, D and E categories but G is another that may need to be considered and lenders are seeking further guidance and clarification on this matter from the FCA."

In addition he suggested that dealers look at four key factors before making a decision on FCA compliance ahead of April’s rule changes.

These were:

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  • What do dealers earn from finance and would foregoing finance offers affect profitability significantly?
  • In not offering finance would potential customers be significantly put off ?
  • Does not being FCA registered negatively affect how you are perceived?
  • What costs are associated with becoming FCA compliant?

The first three questions Tew believed would see positive responses in favour of FCA registration, but that the fourth question that will be the deciding factor for many dealers.

Unlike Alphera, iVendi did not believe the upcoming introduction was leaving dealers little time to decide.

Tew said: "Our general advice at the moment is to apply to the FCA for interim permission. This will only cost a few hundred pounds and will buy you time to find out more about the whole issue and the processes involved."

And added: "There will be a transition period of 6 months from the 1 April 2014 and if dealers then think it’s too onerous they can then choose to opt out."

Earlier this month the FLA said that the FCA rules did not bring any surprises and that they had been pleased with the level of practicalities taken on board when introducing the rule changes.