FSA: More consultation on PPI needed

The Financial Services Authority (FSA)
is to increase the consultation period for its review of the
payment protection insurance (PPI) market by a further six
weeks.
All interested parties will have until 22 April to send further
comments to the FSA about its proposed remedies to the way sales of
PPI are regulated.
The move comes in response to feedback to a previous FSA
consultation paper on proposals for regulating PPI sales, which
attracted a “very critical” response from the industry, although
the responses from consumer groups were “very supportive”, the FSA
said.
Financial research company Defaqto warned that compensation for
consumer PPI complaints could cost the industry up to £3
billion.
Motor dealers which sold PPI alongside car finance agreements could
find themselves on the hook for a share of this figure – especially
dealers which sold single-premium policies, which were particularly
criticised by the FSA.
Defaqto insight analyst Ben Heffer said: “[Single-premium policies
are] the class of business which attracted most complaints. If
dealers are found to have mis-sold the policy they could be
responsible for reimbursing the whole premium – not just the
commission they earned on the deal.
“Further, the FSA requires a root cause analysis, and if other
clients – who may not have complained – are affected, they have to
be reimbursed too.”

 

RMI survey finds rise in
dealer confidence

Car dealers’ confidence in their
profit margins is up and their view of business in the next six
months is “reasonably positive”, a new survey has shown.
The latest Retail Motor Industry (RMI) National Franchised Dealers’
Association Dealer Attitude survey showed 80% of dealers were
feeling more confident following “welcome relief” brought by the
government scrappage scheme.
The scheme brought with it a surge of interest in dealers, meaning
a brighter outlook for future business.
RMI director Sue Robinson said: “Dealers also reported an increase
in satisfaction surrounding the relationship with their
manufacturer despite the economic downturn.”
Three-quarters of dealer networks reported an increase in
satisfaction over their profit return, boosting the dealer average
from 3.0 to 3.4 out of 5 from the survey last summer.
Two-thirds of dealers surveyed also said they had seen an improved
or sustained partnership with manufacturers compared to summer
2009.
Robinson added: “Most dealer networks have reported improved
profitability, and the scrappage scheme has played a key role in
achieving this alongside the work done by franchised dealerships in
cutting costs, and streamlining their business operations.”
There was also a “significant feeling of value for holding a
franchise”, averaging 7.2 out of 10, rising from 6.7 in the summer
2009 survey.

 

New car PoS finance up 23% in
January

Consumers bought 23% more new cars
using dealer-arranged finance in January 2010 than in the same
month last year, the Finance & Leasing Association (FLA)
said.
However, used car finance showed a fall of 19% during January,
while business new car finance sales were down by 23%, reflecting a
tendency among business owners to extend rather than replace fleet
vehicles, the FLA noted.
FLA chief economist and head of research Geraldine Kilkelly said:
“The growth comes against abnormally low consumer new car finance
sales in January of last year.
“The cold weather may have prevented consumers venturing out to car
showrooms in January, and anyone thinking of purchasing a new car
may have decided to wait for the ‘10’ number plate, released on 1
March.”
The FLA also announced that the Ford Retail network has become the
latest retail group to sign up to its Specialist Automotive Finance
programme, and achieve ‘SAF Approved’ status.
Seven of the top 20 dealer networks are now SAF-certified, said FLA
head of motor finance Paul Harrison.
Alan Maloney, head of finance and insurance at Ford Retail, said:
“Providing our specialist business managers with training in
complex aspects of business such as motor finance ensures they have
the competence and skills to provide the best finance advice to our
customers.”

 

Sale and leaseback proves
popular in 2009

Sale and leaseback deals were a
popular cash-raising measure for UK companies last year, with a
survey finding that firms raised over £50m in 2009 by selling their
wholly-owned vehicles and leasing them back.
The survey, carried out by YouGov on behalf of Lex Autolease, also
found that 27% of finance directors intend to sell and lease back
company vehicles this year.
“More companies can benefit from releasing the capital tied up in
their vehicles and begin the process of using managed contract hire
arrangements to drive down the costs of mobilising employees [by
using sale and leaseback],” said Andrew Kirby, regional sales
director.

 

Survey finds top fleet
performers

A survey carried out by fleeteye has
looked into customer satisfaction levels among fleet
clients. The winner in the 25 to 500-unit sector was Tusker, while
Alphabet triumphed among fleets with 500+ units.