Finance Sector Raises Issues with Guidelines
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The trusted voice of the auto industry for more than 25 years Issue 1-2015 www.autofile.co.nz 13 January 2015 In this issue Finance sector raises p12 Registrations in Japan fall p16 Southland regional report issues with guidelines p22 Honours in vehicle industry p28 Huge year for used imports n industry organisation considering submissions received Commission’s court action against p31 Sales outrun 1984’s record has flagged up wide- by December 23. Motor Trade Finances (MTF) has ranging concerns about However, the Financial yet to be resolved. p32 Ford Ranger topples Hilux Athe government’s draft responsible Services Federation (FSF) – which The government says a lending code. has 47 members, including many key feature of the reforms is The document, which is at the in the automotive industry – has introducing lender principles and centre of the clampdown on loan drawn attention of the Ministry responsibilities under the CCCFA. sharks, will offer guidance on for Business, Innovation and These aim to reinforce and lender responsibility principles Employment (MBIE) to what it set good practices to protect included in last year’s Credit feels are serious flaws. consumers, and promote Contracts and Consumer Finance These include the timeframe informed choices and effective Specialised Amendment Act (CCCFA). for developing the code and costs competition in the market. The code’s final version will to industry. The principles require lenders training that’s be published by March “to give In addition, loan and default to exercise care, diligence and proven to lenders time to adapt processes fees providers can charge are up skill when advertising credit, and increase profits as necessary to comply” after in the air because the Commerce before and after approving loans. [continued on page 4] Agency serves exemption warning Sports car he NZTA is advising of some “serious safety concerns”. Ian Baggott, the NZTA’s range expands importers of modified and The vehicles had been adapted manager of technical support and low-volume vehicles to by U-Drive Mobility (UDM) to motor vehicle certification, told Tfollow the correct channels to ensure transport people with disabilities. Autofile this matter is a reminder they are roadworthy in this country. They were deemed for the industry to follow LVV The agency recently issued unroadworthy when the NZTA rules from the outset – and before exemptions from the low-volume revoked their certifications after modifications are completed. vehicle (LVV) process for six of talks with the Low Volume Vehicle “The system and its LVV eight modified Skoda Yetis after Technical Association (LVVTA), standards have been set up to guide ordering their removal from which alerted the agency to issues people through the process using service in December 2013 because early in the process. well-developed methods,” he says. p14 [continued on page 8] ACCESSORY BUNDLING Retro Vehicle Enhancement MORE SALES CREATE AN www.rve.co.nz EXCLUSIVE MODEL MORE PROFIT 0800 RETRO 4 U FOR YOUR BRAND CUSTOMERS FOR LIFE VIEW VIDEO WWW.DEALERSHIPEDITIONS.CO.NZ Driving Solutions jacanna load it ad_art.pdf 1 5/06/12 3:54 PM C M Y CM MY CY CMY K jacanna load it ad_art.pdf 1 5/06/12 3:54 PM editor’s note Call Steve Owens now on 021 947 752 Complex issues facing the industry he government believes its compliant companies flouting responsible lending code the law. will meet the purposes of A survey of FSF members in Tthe Credit Contracts and Consumer 2014 estimates compliance costs to Finance Amendment Act (CCCFA). date – outside the loan-shark laws EDITOR ADVERTISING The aim is for consumers to – comes to about $40 million over Darren Risby Brian McCutcheon [email protected] [email protected] have access to information to the past few years. 021 137 5430 021 455 775 make well-informed decisions All of them will again have to about credit and be protected from plough hundreds of thousands JOURNALIST & ONLINE PRODUCER DESIGNER underhand practices of loan sharks. of dollars into auditing processes Cameron Carpenter Adrian Payne [email protected] [email protected] The code also aims to give and systems, revising documents, finance providers certainty in redeveloping websites, training Autofile magazine is also available online as a readable file or downloadable as a PDF. Subscriptions are available at Autofile Online – www.autofile.co.nz. complying with the law without staff and monitoring compliance. Back copies are also available on the website. be subjected to unnecessary FSF members will do what’s Copyright: Published twice monthly by 4Media Ltd, PO Box 6222, Dunedin 9059. compliance costs. required because they are All statements made, although based on information believed to be accurate and reliable, C The changes are all part of already responsible lenders and cannot be guaranteed, and no liability can be accepted for any errors or omissions. Reproduction of Autofile in print or digital format in whole or part without written permission, M enforcing updated legislation with have no choice. whether by copying or any other means, is strictly forbidden. All rights reserved. ISSN 0112-3475 (print) / ISSN 2350-3181 (online) Y many having to be in place by June 6. But will the loan sharks? CM But the finance and automotive What’s going to be done to force industries will have to foot them into line or out of business? MY associated set-up and continued After all, it’s these shady CY compliance costs, which in turn operators the government’s guns CMY may result in lower margins and have in their sights. K higher policy premiums. This issue of Autofile also HAPPY The Financial Services features a thought-provoking WITH YOUR CURRENT Federation (FSF) raises many valid article on the Kiwi fleet penned by concerns in its submission on the Kit Wilkerson, policy analyst and ARE YOU VEHICLE SUPPLIER draft lending code. adviser at the Imported Motor ? Why issues surrounding the Vehicle Industry Association. WHAT YOU GET WITH loan-shark laws aren’t attracting “What’s safer than a new more media attention is bordering car? How about a safer car? I ask on incompetence – with a few because I hear concerns about our exceptions, such as the Sunday ageing fleet,” he writes. Star-Times – because their While many people think RELIABILITY implications are as far-reaching as modern cars are safer and more First choice for NZ dealers STOCK READY the Consumer Law Reform Bill. efficient, other issues include the for 20 years FOR SHIPPING Extensive range of pre-purchased Perhaps they have been parked health and social costs of accidents. stock available for shipping NOW in the too-hard box, although some Then there’s how much cars EXPERIENCE “journalists” appear content to trot pollute the environment – not only Our buyers are knowledgeable about NZ dealers requirements TRUE DEALER out government press releases as through tailpipe emissions, but also WHOLESALE gospel and virtually verbatim. during the manufacturing process. Fixed fee includes all Japan side: CHOICE transport, documents and taxes But back to the FSF – its 47 There is an argument for using 100,000 vehicles per week available members include the finance more than a white line in the sand through our auction search engine divisions of BMW, Mercedes-Benz, STRICTLY – vehicle age – as a proxy. DEALER ONLY Nissan, Toyota, Yamaha, Ateco, We all want a cleaner, safer and PEACE OF MIND Heiwa Auto never sell or export vehicles Enterprise Cars, Giltrap and the more efficient fleet, but how we get All vehicles Ramp Inspected to private buyers before departure Aqua Group. Others include the there may well be more complicated. fleets, Protecta, Provident, MTF, Wilkerson would like to hear the Greg Bardsley Jason Robb Autosure and Avanti. views of Autofile readers on this ph: 0279 363 595 email: [email protected] ph: 027 413 3222 email: [email protected] There are many more and it’s issue, so get scribbling. www.heiwa-auto.co.nz hardly a list of loan sharks or non- Darren Risby, editor www.autofile.co.nz | 3 news [continued from page 1] Compliance costs mount up They also require compliance with McMorran says issues have been alone what may be required to specific rules. identified in proposed disclosure More online fulfil them. The purpose of the lending regulations, which – depending Visit www.autofile.co.nz to find “The FSF urges regulators to code is to expand on the principles on what the final version out more about the draft responsible take account of the timeframe and responsibilities, and set in will look like – will lead to lending code. and ensure changes to The website also has more on the Financial stone guidance on how finance substantial and expensive responsible lenders’ systems Services Federation’s concerns about the providers implement them. changes. proposals. and processes are mostly “The code isn’t binding, “The FSF has many They cover policy documents, advertising, minor unless a significant nor is it a safe harbour,” says members who operate in assessing applications and the lack of consumer benefit will result. the MBIE. “However, evidence Australia and New Zealand,” definition for “substantial hardship”. “We ask the Commerce It has also flagged up issues in the of compliance is to be treated she says. Commission be given flexibility guidelines about what happens as compliance with lender “Australian divisions are when borrowers default. to delay enforcement action responsibility principles.” undergoing major upgrades to against a lender showing systems to accommodate demands willingness to comply but BRINGING IN THE CHANGES from commercial developments the FSF and its members. They unable to achieve this within the The FSF says a significant area of and government changes.