Retailers, already fighting to protect F&I income in the face of growing incursion from direct lenders, do not need to have that source of profit threatened further by finance companies.

This is the message from Capital Motor Bank’s director Paul McGill, who calls on his counterpart companies to remember “who their real customers are”.

He is concerned that finance houses could be increasingly making direct approaches to customers and compounding the damage inflicted on point of sale retailer F&I business.

In a bid to raise awareness about “soliciting consumers directly”, McGill claims: “There are numerous marketing initiatives out there that claim to help dealers improve F&I income. The concern is that it’s little more than a ploy to soliciting their customers and then theoretically giving the customer back to the dealer, but only provided they are a so-called approved dealer.”

Central to his campaign is the need for retailers, aided by finance houses, to present POS finance and insurance products “in a clear and plain fashion, good value for money way”. Otherwise, McGill says, the business will continue to shrink and be under threat from direct lenders who don’t pay commission.

The partnership between finance providers and retailers should publicize the fact that direct lenders operate under a veil of “misty advertising, highlighting one token headline interest rate while delivering something altogether higher when the deal goes through”.

McGill believes that the growing amount of regulations involved in selling finance and insurance could provide some relief as it generates major software update problems and escalating costs for lenders, for whom car finance is not a core interest.

He reassures the 4,000 new and used outlets operating Capital Bank Motor schemes that: “We have no intention or appetite for excluding retailers in any of our processes. We believe in partnership and treasure this source of business. We don’t sell cars or run franchises and we want to help dealers recoup some of the £500m that is currently being lost annually to direct lenders.”

Capital Bank has a 20-strong F&I team, which it claims seeks means of protecting and maximizing F&I revenue. Quick response tactical offers, including low interest rate promotions, are part of that strategy.

McGill’s rallying call continues: “While car buyers are the lifeblood of our business, motor finance providers need to remember that it is the dealer who is their primary customer. The finance providers need to work with, or through, our dealerships to target consumers and avoid taking a more direct route that excludes their partners.”