Motor traders need to act now if they are to meet compliance regulations when compliance comes into force, warned Norwich Union.
Norwich Union motor trade manager Barry Hogg, said; "This legislation is set to hit the motor trade sector hard, as a significant proportion of its business profits come directly from selling financial services products such as creditor/payment protection, gap insurance, warranties, as well as motor insurance, including breakdown cover.
"Motor traders, particularly within the franchised sector, will have no option other than to seek authorisation and comply with the new terms.
"Opting out of selling financial services is likely to jeopardise the future of many such businesses."
Meeting compliance standards will also force up the cost of staff training, said Hogg, especially in an industry with low staff retention levels.
