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<p>The Government works closely with the UK automotive industry to understand the
issues and opportunities the sector faces. The Government will continue its longstanding
programme of support for the sector’s competitiveness.</p><p> </p><p>The Government
has fundamentally reformed regulation of the consumer credit market, transferring
regulatory responsibility from the Office of Fair Trading (OFT) to the Financial Conduct
Authority (FCA) on 1 April 2014. This more robust regulatory system is helping to
deliver the Government’s vision for a well-functioning and sustainable consumer credit
market which can meet consumers’ needs.</p><p> </p><p>Car finance companies which
offer personal contract purchase products are required to meet the standards that
the FCA expects of lenders, including making affordability checks and providing adequate
pre-contractual explanations to consumers. FCA rules are binding, and the FCA has
a wide enforcement toolkit to take action wherever these rules are breached.</p><p>
</p><p>The FCA is committed to tackling sources of consumer detriment, and is looking
at the car finance market to ensure that it works well and to assess whether consumers
are at risk of harm. The FCA is carrying out supervisory work with lenders, and is
carefully scrutinising firms’ sales practices and processes, to decide what further
interventions may be necessary. This work includes assessing how well firms are managing
the risk that asset valuations could fall, and how they ensure that they adequately
price risk. The FCA will publish an update on this work in Q1 2018.</p>
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