Kew Vehicle Leasing first broker to disclose finance commission
12 December 2019
Kew Vehicle Leasing is the first leasing broker to openly disclose the amount of finance commission it receives on all regulated Personal Contract Hire (PCH) agreements.
Additionally, Kew Vehicle Leasing will also disclose the lender as a matter of course.
Car finance is currently under investigation by the Financial Conduct Authority (FCA) concerning the amount of commission paid to finance brokers and dealers. The FCA says the action it is taking will save consumers £165m a year*.
The broker says it is taking the lead because of an increased desire for openness in dealing with customers requesting personal lease deals.
While Kew Vehicle Leasing is a leasing broker and not a car finance broker, the leasing provider says its bold step will distance it further from those finance brokers subject to FCA scrutiny.
Lee Jones, managing director of Kew Vehicle Leasing, commented: "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.
"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."
The commission disclosure and vehicle funder appears on all orders, clearly stating the amount of commission being paid and the funding partner.
However, customers are able to ask about commission payments at 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 added.