Ensuring a greater level of transparency for PCP and potentially PCH products is at the heart of the latest innovation from financial technology experts Dealflo. It is a move that will help to provide valuable process evidence for both dealers and finance companies.

The move is well-timed to help the motor finance industry to support the levels of transparency sought by the Financial Conduct Authority (FCA) which in its Business Plan¹published on April 8^th reflected that; “we want to identify whether consumers have sufficient, timely and transparent information when taking out motor finance”.

In the wake of negative media coverage of PCP in both the consumer and trade media², the innovation will be welcomed by auto finance companies looking to demonstrate that they are acting transparently, and with the customer’s best interest in mind.

Abe Smith

Abe Smith CEO & Founder at Dealflo reflects; “the success of PCP finance in automotive retailing has not come without its critics. One of these criticisms has centred upon consumer awareness of agreed mileage and excess mileage terms. Our latest innovation is designed to help lenders to address these issues seamlessly through our automated agreement platform. Based upon oncurrent customer base this could quickly provide a new level of support to around 35% of all auto finance agreements.”

Dealflo has created a smart solution that integrates into its platform helping to protect dealers and finance companies by ensuring customers acknowledge their mileage terms.

While mileage and excess mileage is already included in the customer agreements that are signed through Dealflo, the business has added a new option for new and used PCP agreements. This simple additional step sits elegantly into the agreement approval process:

• Customers are presented with a screen that clearly identifies important terms contained within their PCP agreement including:

o  Agreed mileage

o  Estimated mileage

o  Excess mileage cost per mile

• These need to be acknowledged and approved by the customer before the process proceeds for electronic signature

As with all automated agreements within the Dealflo end-to-end approach, the agreement approval process authenticates that it is the customer, rather than a dealer employee or other third-party who completes agreement process.  The customer’s acceptance of these terms and conditions is then stored as part of the digital evidence pack.

Smith concludes;“We are pleased to be championing the highlighting of this important area of a PCP agreement through our platform. We see similar moves in other areas of financial services to stress key information to support transparency and have adapted this principle to ensure customers are clear about their mileage terms, protecting both lender and dealer.

 “As well as this higher level of transparency, this move is good for the wider value of PCPs, creating a higher level of integrity around the product, something that can only be good for reputations and retention.”

¹ https://www.fca.org.uk/publication/business-plans/business-plan-2018-19.pdf

² https://www.ft.com/content/785fe8e6-5fe2-11e7-91a7-502f7ee26895