Following a recent review by the Financial Conduct Authority (FCA), it is starting to appear that a dealer-free financing structure might be on its way.
Instead of dealer involvement, with its high commission charges and interest, motor finance of the future may be undertaken with technology taking the place of dealers to help customers navigate the lending market.
Following analysis from 20 motor finance providers and its own mystery shopping experiences, the FCA has expressed concern regarding commission levels charged by brokers when this is linked to the interest rate charged to customers.
According to an FCA spokesperson, higher broker commission can equate to customers paying over £1,100 in interest charges over a four-year term based on a typical motor finance agreement of £10,000.
Too much discretion
The FCA states that this is due to brokers having too much discretion on how to charge … Read More