The growth in PCP (Personal Contract Purchase) has been a real boost to the UK motorcycle market in recent years and almost all forward-thinking dealers are now successfully promoting PCP to customers to generate sales. Buyers like it because it offers relatively low monthly payments and the opportunity seamlessly to move on to another new motorcycle at the end of the term, at similar monthly payments. Dealers like it because, in addition to the sale, it generally keeps customers coming back to the dealership for servicing and, hopefully, makes a subsequent sale much easier and provides a good quality part-exchange. But as with any consumer credit offering, the regulators are always keeping a watching brief on how such schemes are operating to ensure there is no consumer detriment.
The automotive industry is already on the radar of the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) who are particularly concerned about two key aspects of the UK consumer credit market. These are whether PCP “guaranteed future values” are realistic and whether lenders are credit scoring buyers rigorously enough, especially since many are only used to a climate of low interest rates.
There is no cause for panic, though, whether dealers are offering consumer credit already, or about to consider it, as long as they ensure continued compliance and keep pace with any FCA changes and developing guidance. Dealers can manage this themselves or use specialist service providers such as Product Partnerships to take this burden away.
Product Partnerships (www.productpartnerships.com) will be in attendance at Trade Expo in the Knowledge Shop (14 – 16 January, Stoneleigh Park, Warwickshire). They will also be making brief presentations on aspects of compliance in the Expo seminar area on the Sunday and Monday. If you have any queries then please pay them a visit.
A fuller version of this article will appear in the February issue of BDN.