As a result of the Hayne Royal Commission into the banking and finance sector, the Federal Treasury has indicated that it is determined to push for legislative changes that will alter the way dealerships selling finance will need to operate under an Australian Credit Licence from the 1st of July next year.
The current point-of-sale (POS) exemption contained in the National Consumer Credit Protection (NCCP) Act says that an automotive dealer or retailer does not need to hold a credit licence or comply with responsible lending obligations. These obligations and legal responsibilities currently fall back on the bank or lender who assesses and issues the loan.
Under the changes, any new or second-hand automotive dealer who is providing financial services will have to either hold an Australian Credit Licence or be appointed as an authorised credit representative of a credit licence holder if they want to arrange finance on behalf of a customer.
This change to POS lending may alter the way some new and second-hand automotive dealer members undertake financing arrangements with their customers.
If you are concerned about your obligations, contact your Industry Engagement Specialist, Nathan Groves, who is available to assist if you have any concerns. Please contact him by clicking here.
Nathan has a background in dealership finance and is well across car loan issues in relation to vehicles sold to your customers.