Target Market Determination (TMD)
Consumer Lease Product
FlexiBuy
Effective Date: 7 October 2024


  1. Introduction

This Target Market Determination (TMD) has been prepared by FlexiBuy in accordance with the obligations set out under Part 7.8A of the Corporations Act 2001 (DDO obligations), and in compliance with the National Consumer Credit Protection Act 2009 (NCCP Act). The purpose of this TMD is to provide clarity regarding the class of consumers for whom this consumer lease product is designed, the conditions and restrictions on its distribution, and the manner in which the product will be reviewed to ensure that it remains suitable for the intended target market.

  1. Product Description

The Consumer Lease Product offered by FlexiBuy is a lease arrangement that enables a consumer to lease a motor vehicles for a specified period in return for periodic payments. Under this product, the consumer does not have ownership rights over the goods, unless a separate arrangement for purchase is entered into at the end of the lease term. Consumers may have the option to return the goods at the conclusion of the lease term, renew the lease, or negotiate a purchase.

This product is subject to the provisions of the National Credit Code, part of the NCCP Act, which governs consumer leases in Australia.

  1. Target Market

This section outlines the class of consumers for whom this product is intended, based on likely financial objectives, needs, and situations.

3.1 Likely Objectives and Needs of Consumers in the Target Market

The Consumer Lease product is likely suitable for consumers who:

  • Seek access to goods without immediate ownership, preferring flexibility over the option to purchase outright.
  • Require the use of goods without the upfront capital required to buy the items.
  • Prefer the ability to return, renew, or negotiate a purchase at the end of the lease term.
  • Wish to spread the cost of use of goods over time in the form of periodic payments, rather than a lump-sum outlay.
  • Are aware that they may pay more over time through the lease than they would if they purchased the goods upfront, but prioritize the flexibility provided by leasing.
  • Have a stable financial situation that allows them to meet regular payments over the duration of the lease.

3.2 Financial Situation of the Target Market

Consumers suitable for this product are likely to have the following financial profile:

  • Regular, stable income sufficient to meet the periodic lease payments, as well as any additional charges and fees under the lease.
  • Capacity to make consistent payments over the life of the lease without experiencing undue financial hardship.
  • Are not experiencing financial stress, or have the ability to meet all their existing financial obligations without taking on unsustainable debt.

3.3 Consumers Outside the Target Market

The product is unlikely to be suitable for consumers who:

  • Seek immediate ownership of goods, as leasing does not provide ownership rights unless negotiated separately.
  • Have the capital to purchase the goods outright, as leasing typically involves a higher total cost over time compared to purchasing.
  • Are experiencing financial hardship or have irregular income, making regular lease payments difficult to sustain.
  • Are unable or unwilling to commit to a contract where the goods must be returned, unless a separate agreement for purchase is entered into.
  • Require a credit product that reduces total costs over time rather than provides flexibility in payment.

  1. Key Attributes and Product Suitability

The Consumer Lease Product has the following key attributes, which align with the identified target market:

  • Flexible use of goods: Consumers can use the goods for the duration of the lease without the obligation to purchase.
  • Periodic payment structure: Consumers make fixed, regular payments over the term of the lease, providing structured, predictable expenses.
  • Return, renew, or purchase options: At the end of the lease term, consumers may return the goods, extend the lease, or negotiate a purchase.
  • No ownership rights during the lease term: Ownership is not automatically transferred at the end of the lease term.

These attributes make the product suitable for individuals seeking temporary access to goods without the need for ownership and with the flexibility to manage payments over time.

  1. Distribution Conditions and Restrictions

5.1 Distribution Channels

The distribution of this product is subject to certain controls to ensure that it reaches the appropriate target market. The following distribution channels have been approved for this Consumer Lease Product:

  • Direct sales through FlexiBuy either in-person at physical branches or through our online platform.
  • Accredited motor vehicle dealerships, who have been appropriately trained and authorized to recommend this product to eligible consumers.
  • Third-party platforms, where distributors have undergone training to understand the product’s key attributes and ensure it is only distributed to consumers within the target market.

5.2 Distribution Conditions

The following conditions and restrictions apply to the distribution of this product:

  • Suitability assessments must be conducted to determine if the consumer meets the criteria outlined in the target market section.
  • Distributors must ensure that the consumer fully understands the total cost of the lease, including the comparison between leasing and outright purchasing, and the implications of returning, renewing, or purchasing at the end of the lease.
  • Consumers must be provided with all disclosure documentation in accordance with the National Credit Code, including information about fees, charges, and obligations under the lease agreement.

  1. Review Triggers and Review Periods

To ensure the continued appropriateness of the Consumer Lease Product for the target market, this TMD will be reviewed under the following circumstances:

6.1 Review Triggers

  • There is a material change to the terms of the product, including changes in pricing, fees, or the goods available under the lease.
  • A significant number of consumer complaints or feedback indicate that the product may not be meeting the needs of the target market.
  • A regulatory change affects the manner in which the product is distributed or offered, including updates to the National Credit Code or DDO obligations.
  • There is a significant increase in defaults, hardship requests, or similar indicators that suggest the product may no longer be suitable for the intended target market.

6.2 Periodic Reviews

  • The first review of this TMD will take place no later than 12 months from the effective date.
  • Following the initial review, subsequent reviews will be conducted at least every 24 months, unless a review trigger occurs earlier.

  1. Reporting and Monitoring

Distributors are required to report the following information to FlexiBuy at quarterly intervals:

  • The number and nature of consumer complaints received in relation to the product.
  • Any significant dealings where the product has been issued to consumers outside of the target market.
  • Sales data, including details of the volume of sales and any emerging patterns that suggest the product is not being distributed in line with the TMD.

Distributors must maintain records of the assessment and rationale for determining that the product is suitable for the consumer, including records of any inquiries made into the consumer’s financial situation.

  1. Consumer Understanding and Disclosure

To ensure that consumers fully understand the product’s terms and attributes:

  • Distributors must ensure that consumers are provided with all relevant information, including a summary of key product features, fees, and their obligations under the lease.
  • Distributors must verify that consumers understand the potential implications of leasing, including the total cost over time and the options available to them at the conclusion of the lease.

  1. Approval and Review

This Target Market Determination has been approved by the Board of Directors of FlexiBuy on 7 October 2024. It will be reviewed in accordance with the schedule outlined above.


Contact Information

FlexiBuy

Customer Service: 1300 459 111
Email: mymates@flexibuy.com.au
Website: FlexiBuy