In today's rapidly evolving digital landscape, consumer satisfaction stands as the cornerstone of success in the vehicle retail industry. With the introduction of Consumer Duty regulations, aimed at ensuring fairness and transparency, the purchasing journey has undergone significant transformation.
In this blog, we delve into the impacts of these regulations on consumer experiences, shedding light on how they have elevated satisfaction levels among vehicle buyers in the digital age.
Empowering Consumer Decision-Making:
Our recent study, involving 1000 used vehicle buyers approximately four months post the enactment of Consumer Duty regulations, has provided invaluable insights into the regulations' impact on consumer experiences.
This research illuminates a landscape where fairness, transparency, and informed decision-making notably contribute to heightened satisfaction among consumers. The increased emphasis on compliance has led to elevated satisfaction among consumers, as mandated by the Financial Conduct Authority on July 31, 2023.
This has resulted in positive outcomes, with respondents overwhelmingly expressing positivity towards fairness (87%), transparency (82%), and the availability of information on finance products (85%).
Additionally, 85% of buyers felt adequately informed about available finance products, with 88% expressing confidence in selecting the right finance product for their needs.
Upholding Trust and Satisfaction:
The survey highlighted the user-friendly nature of online vehicle finance processes, with 91% of respondents finding them well-structured and easy to understand. "It felt like a breeze navigating through the options," shared one satisfied buyer. Additionally, 83% believed that the finance choices offered represented fair value, reinforcing the notion of equitable transactions.
Integral to consumer trust is assurance regarding personal data handling, with 87% of respondents noting that such procedures were fully explained. "Knowing how my information would be handled puts my mind at ease," stated one respondent, echoing the sentiments of many. The pinnacle of consumer satisfaction was reflected in retailer fairness, with an overwhelming 91% of buyers rating their experiences as seven or higher on a scale of one to ten. "I felt respected and fairly treated throughout the process," affirmed one respondent, capturing the essence of positive dealership interactions.
Striving for Excellence:
While the findings show people are following Consumer Duty regulations well, there remains room for improvement. These positive results not only reflect successful compliance journeys but also highlight areas for refinement. Continuous improvement is essential.
James Tew, CEO at iVendi, said
“There are two ways of viewing these results. The immediate one is that, just a few months after Consumer Duty was introduced, we are seeing very high levels of satisfaction among vehicle buyers, measured using relevant metrics. It really does suggest that the new regulations are working plus, of course, we would expect to see these numbers improve further as they bed in.
The other view is that there is still room for improvement - 13% of respondents did not feel the motor finance process was fair and transparent, and 15% said they did not see sufficient information explaining the available motor finance products. Things are arguably going well, but there is certainly no room for complacency among retailers.”
Confidence all-around:
The implementation of Consumer Duty regulations in July 2023 marked a pivotal shift towards clearer and fairer sales processes. These regulations, introduced by the Financial Conduct Authority, have steered the industry towards a consumer-centric ethos, fostering trust and accountability.
Evidence of consumers’ ease and confidence in online motor finance applications illustrates that Consumer Duty’s four key outcomes are being met: Products and services outcomes, price and value outcomes, consumer understanding outcomes, and customer support outcomes.
Room for Improvement:
Despite the remarkable strides made in compliance with Consumer Duty regulations, there remains a noteworthy 13% of respondents who feel that the motor finance process lacks transparency and fairness. Additionally, 15% expressed a desire for more comprehensive information on available motor finance products.
To address these concerns, retailers need to have accurate and up-to-date MI that should include data on customer interactions, customer journeys, customer complaints, and customer satisfaction levels. Businesses should also use this data to assess the effectiveness of their processes, procedures, and products.
Most retailers who are operating with a multi-lender panel are very likely to be submitting applications and checks individually to those lenders. Relying on separate processes and systems leaves too much room for error - something the FCA wants to avoid when it comes to consumers' private information - and is easy to do when running the same information through multiple systems.
Through the iVendi Connected Retailing Platform, dealers can compile, track, and report on MI. The platform also provides dealers with additional data such as audit trails that capture and demonstrate compliant selling across a panel of lenders, data on market finance rates to ensure dealer offerings remain competitive, and sufficient insight across all their lender partners to produce accurate representative examples. Implementing these can help to make consumers feel empowered and informed at every step of their journey. You can learn more about how Consumer Duty can strengthen your compliance journey here.
Conclusion:
The "Driving Future Success: Five Key Trends in Online Vehicle Retail" white paper acts as a guiding light amidst the evolving automotive industry. It sheds light on the path ahead and delves into the needs of vehicle buyers in this digital age, and gives practical strategies to elevate retailers' performance.
Alternatively, book a demo with us, and let's chat through the solutions that can effectively meet the needs and expectations of the modern buyer.
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