Kew Vehicle Leasing will now disclose the amount of finance commission it receives on all regulated personal contract hire (PCH) agreements.
The move is in response to the ongoing investigation by the Financial Conduct Authority (FCA), concerning the amount of commission paid to finance brokers and dealers.
Go deeper with GlobalData
Reportedly the first in the industry to disclose commission amounts, Kew Vehicle Leasing said it is taking the lead because of an increased desire for openness in dealing with customers requesting personal lease deals. The firm will also disclose the lender as a matter of course.
Though the company is a leasing broker and not a car finance broker, it said this step will distance it further from those finance brokers subject to FCA scrutiny.
Managing director of Kew Leasing Lee Jones said: “It’s a significant step for us to be first to disclose commissions. We are leading the way in the leasing broker market. If you look at the way Independent Financial Advisers work – disclosing the lender and the amount of commission payable on, say, a mortgage quotation – it is made quite clear the amount being paid for the service.
“I don’t see leasing brokers being any different – why shouldn’t we provide the same level of transparency? More to the point, I suspect customers will be surprised at the level of commissions, which are not in the thousands of pounds that customers assume. On average it is 1-2% of the vehicle P11D value,” he added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataJones said he also hopes it will demonstrate the value leasing brokers provide.
“I hope that it will also demonstrate the remarkable value leasing brokers provide. We work with multiple manufacturers and dealer groups to ensure the best vehicle discount terms, service and lead times for customers, before managing the credit application on their behalf along with vehicle delivery and in-life support where required. It adds up to exceptional value for money,” he said.
The commission disclosure and vehicle funder appears on all orders and states the amount of commission being paid to the funding partner.
Customers are able to ask about commission payments during any stage of the vehicle acquisition process.
“Treating customers fairly is at the heart of FCA regulation. We strive to do this at every stage of the process – and being the first leasing broker to disclose commission is another step towards assisting the customer in a fair and transparent manner,” Jones said.
