Terry Lee’s Post

Being 100% compliant with GAP coverage guidelines doesn't have to be painful. Over the past few years vehicle prices and interest rate hikes have led to higher financing costs. Consumers are stretching out their loan terms to maintain lower monthly rates. Higher costs and longer loan terms are two of the reasons people turn to GAP coverage. GAP coverage is more important to lenders as a result of this increased interest. If you are struggling to stay compliant or just want to be more efficient, there is a better way to handle this process. Send me a message and I would be more than happy to help to continue this conversation. Let's make 2024 a better year for you and your business.

Reach out if you need help creating and automating this process. #Compliance with this issue is straightforward with the right tools and processes, especially when you can leverage a knowledge graph containing federal and individual state requirements. #ancilaryproducts #GAP #CFPB #regulatorycompliance #regulation #machinelearning #VPP #refunds

Some sensible points raised in this article, well worth a read.

Julian, Very many thanks for the article in your AFP website always insightful and thought provoking as revealed in the comments and different perspectives that you have elicited from your article. Automotive Finance has a proud history and the provision of finance has been successful for ‘All Parties’ – Manufacturers, Dealers, Customers, Banks, Direct Lenders and Brokers and most importantly the Consumer probably 95% of the time. Over the years the developments in Retail Motor Finance have generally been very positive with the expansion of product offerings (PCP, PCH, Salary Sacrifice) supported by integrated technologies and online platforms that enable the consumer to search for a vehicle and finance transaction that matches their personal circumstances including affordability and often linked to their personal credit rating. A key benefit of course is that the availability of finance has enabled the consumer to acquire a vehicle that otherwise may not have been affordable to them. The accessibility of finance has also been particularly beneficial for OEM’s and in parallel car dealers and brokers. Allowing Claims Companies and others to demonize the Retail Motor Finance Industry is not something that the Trade Associations and others should allow. Stand up and explain the benefits of your Financial Services products to the consumer and the economy. A review by the Competition and Markets Authority as you suggest would provide a far more effective analysis of the market confirming the high levels of competition that exist, that pricing is linked to risk / return for the lender and in the large majority of cases the consumer has benefitted from Retail Motor Finance activities.

And a postscript: Allowing Claims Companies and others to demonize the Retail Motor Finance Industry is not something that the Trade Associations and others should allow. Stand up and explain the benefits of your Financial Services products to the consumer and the economy. A review by the Competition and Markets Authority as you suggest would provide a far more effective analysis of the market confirming the high levels of competition that exist, that pricing is linked to risk / return for the lender and in the large majority of cases the consumer has benefitted from Retail Motor Finance activities.

A million motorists claim they were mis-sold car finance in 'PPI-scale' scandal with 30,000 daily complaints being submitted amid potential 'widespread misconduct' according to this story in today's Telegraph. 85% of car sales are on some sort of finance agreement so this could be gargantuan and with the recent Lloyds TSB FOS decision, everyone is going to pile in (with an estimated £10 billion having to be made in refunds). This is where car dealers were adding a fatter slice (the so called "discretionary payment") to make themselves even more money (i.e. ripping off the customer). When it comes to insurance premium finance, I don't know what the figures are but clearly more people making use of it now as the cost of living crisis shows very little sign in going in reverse. Once again, insurance brokers simply must justify any increases in their 'cut' over and above what the lender is already paying them, otherwise look what could happen!! Who's to blame - are lenders also complicit in adding this extra bunce to the loan agreement without putting a stop to it? Many of us will have seen some right rip-offs out there and am sorry that the actions (greed) of the few tarnish everyone else. https://lnkd.in/etVDFmK5

🏎 A slightly different take on this month's distressed retail & consumer update; cars, and car finance (I think this counts?). 🚗 On 11 January the FCA ordered car finance providers to pause handling of complaints and claims for compensation to the Financial Ombudsman Service ("FOS") (which had been snowballing) for nine months, so that the FCA can investigate this matter. To date, the FOS had issued two decisions, against Clydesdale Financial Services Limited, and Black Horse Limited, both in favour of the complainant. 💰 The nature of the complaint, in essence, is that car finance customers were charged too much on their car finance loans, through the levying of "discretionary commission arrangements" ("DCAs") (basically, the dealer or broker getting a bigger commissions for charging more interest, and this not being properly disclosed to the customer). The FCA banned this practice in 2021, so any complaints relate to the period before that, but the car finance providers have been rejecting most complaints/claims. 🚙 The FCA has appointed a skilled person to review motor finance agreements involving DCAs. The output of the skilled person review (expected in September 2024) could be to implement an industry wide consumer redress scheme, as have previously been implemented in respect of payday loan providers and card protection products. The effect of this on car finance providers could be profound, and it might be the case that we see a series of schemes or RPs to deal with those liabilities. 🚚 I have a small amount of skin in the game here, having had a finance agreement for a previous "hot-rod" (regrettably it was written off when a very nice gentleman fell asleep at the wheel and drove into it (everyone was fine)). I've written to the finance provider to ascertain details of any DCAs. Unless it becomes terribly boring and drawn out, I'll keep you posted on progress on this personal investigation/claim (naming no names). 🚕 As usual, I'm giving a shout to my excellent R&C colleagues, but in addition, to my excellent financial institutions colleagues who, as usual, are all over this. We're already speaking to various of our restructuring connections about this, but would be delighted to chat to others on this subject. Do get in touch.

UK motor finance firms are potentially confronting £13 billion in compensation liabilities, reminiscent of the challenges previously seen with PPI. Firms that faced into the challenge and created a clear strategy to handle customer concerns delivered improved customer sentiment and lower cost of delivery compared with their peers; How does your strategy stack up? #MotorFinance #ComplaintsHandling #Operations

There's been a lot of news about the current Financial Conduct Authority investigation into discretionary commission agreements in the car finance world, and most of the news media don't seem to understand the issue. Most reporting tends to fall into one of two camps – evil banks or stupid customers – and neither is really correct. Here's our explanation on what's happening and what consumers can expect over the next few months. #carfinance #FCA #expertadvice

#Credit or #CarFinance 💳 🚗 This is an interesting article that highlights the advantages for customers who decide to pay for their car on their credit card rather than using car finance. 🛡 Martin Lewis explained: ‘If the seller accepts credit card, pay even a penny towards the car on it and you'll get powerful Section 75 protection (provided the car costs between £100 and £30,000). 💡 “The credit card provider is then jointly liable with the car dealer should anything go wrong, so means it should be a lot easier to sort out any issues with the car further down the line.” 📂 “Once you've made all the repayments, that's it. The lender marks the loan as settled on your credit file, and you have nothing left to pay.” https://lnkd.in/e3ER9aM6