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Navigating Vulnerability: An In-depth Guide for Car Dealerships

Updated: Jun 9, 2023

With the Consumer Duty regulations coming into effect on the 31st of July 2023, car dealerships are faced with an important task: understanding and addressing customer vulnerability. In this blog post, we'll explore a practical example of a vulnerable customer and offer effective communication strategies for sales consultants.

Understanding Vulnerability: A Practical Example

Mrs. Smith is a recent widow who's never had to deal with cars before. After the death of her husband, she finds herself needing to purchase a car from your dealership. In this situation, her vulnerabilities are clear:

  1. Lack of automotive knowledge: Mrs. Smith is unfamiliar with cars and the purchase process, which increases her risk of making uninformed decisions.

  2. Emotional distress: Her recent bereavement likely affects her decision-making abilities and overall experience.

  3. Financial uncertainty: With the loss of her husband, there may be changes in her financial situation that affect her ability to afford a car and its associated costs.

As a dealership, how do we offer the necessary support for Mrs. Smith? Here's a four-step approach:

  1. Personalised Assistance: Assign a staff member trained in handling vulnerable customers to guide her through the entire process.

  2. Empathetic Communication: Use simple language to explain automotive terms, and maintain a sympathetic understanding of her emotional state.

  3. Financial Guidance: Offer clear information about finance options and long-term car ownership costs.

  4. One-touch record-keeping – seek her agreement to record her vulnerability for an agreed length of time on your CRM so everyone who needs to assist her can see the circumstances. This means she will also not need to repeat them, avoiding trauma and ensuring an appropriate level of care.

  5. After-Sales Support: Provide robust after-sales support to reassure Mrs. Smith that she's not alone after her purchase. And plan to be in touch with her – as a minimum – after the agreed period for which her vulnerability is recorded. You will need to reassess her circumstances before changing her records.

Effective Communication: A Guide for Sales Consultants

The role of sales consultants is crucial in navigating customer vulnerability. Here are some guidelines on how to communicate important aspects of the car purchase process:

  1. APR Rate: "Mrs. Smith, APR stands for 'Annual Percentage Rate'. It represents the cost of borrowing over a year, including interest and certain fees. A lower APR means you'll pay less over time."

  2. Cooling-off Period: "You should know, Mrs. Smith, that there's a 14-day 'cooling-off' period after signing the finance agreement. During this time, you can withdraw from the agreement without penalty."

  3. Early Termination or Cancellation Clauses: "Should you wish to end the agreement early, the 'early termination' clause outlines what would happen, including any potential costs."

In conclusion, vulnerability can arise from various life circumstances and can take many forms. As car dealerships, it's our responsibility to ensure our customers, regardless of their circumstances, feel supported, informed, and valued. By doing so, we not only comply with the upcoming Consumer Duty legislation but also enhance the overall customer experience.


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