Low Cost Vans welcomes the FCA’s crackdown on car finance commission

The Financial Conduct Authority (FCA) has announced plans to clampdown on how some motor brokers receive commission, which could “save customers £165 million a year”.

The UK's financial regulator aims to save consumers millions by banning commission being set on the interest rate of loans, and replacing it with a fixed commission fee. As things stand, the rate can be set by the brokers themselves, but the incentive of charging a higher rate in return for a higher bonus can sometimes see the buyer unnecessarily out of pocket.

The watchdog’s report says that it will remove “the financial incentive for brokers to increase the interest rate that a customer pays and give lenders more control over the prices customers pay for their motor finance.”

Christopher Woolard, executive director of strategy and competition at the FCA, said: “We have seen evidence that customers are losing out due to the way in which some lenders are rewarding those who sell motor finance. By banning this type of commission, we believe we will see increased competition in the market which will ultimately save customers money.”

“(Low Cost Vans) have always put our customers’ interests first and, as such, the changes will make no difference to how we operate.”

With more than 20 years’ experience, Low Cost Vans’ customers know that we can be trusted to have their best interests at heart. Our dedicated team of experts are constantly monitoring the marketplace for the cheapest vans, and are on-hand to help with any questions, including those about commission.

Rod Lloyd, managing director of Low Cost Vans, says that he welcomes this positive move which will bring greater clarity and fairness to the industry: “We have always put our customers’ interests first and, as such, the changes will make no difference to how we operate.”

At Low Cost Vans we are fully committed to providing clarity to all our customers, and in the interest of fairness we will always:

• Disclose the commission we earn. Just ask - we encourage this practice.
• Be open and honest.
• Never charge you any administration fees or surprise you with any hidden costs.
• Deliver information in a manner that is clear, fair and not intended to mislead you in your decision making.
• Listen to the needs of, and deliver the best outcome for, the most integral part of our business - our customers.

The FCA will now consult on the proposals until January 15, 2020, and plans to publish final rules later in the year. You can read the full FCA report here.

You can see our current range of Low Cost Vans here.