Car finance - hidden commission payments
Discussion
Caddyshack said:
Not sure how I feel about this.
We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
How would you feel if you paid double the available interest rate because the salesman witheld it to line their own pocket?We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
Forester1965 said:
Caddyshack said:
Not sure how I feel about this.
We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
How would you feel if you paid double the available interest rate because the salesman witheld it to line their own pocket?We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
It's not about lazy, it's about being fair. Not everybody is equipped or wants to haggle with people who are trained and paid to do it against them.
In this case the finance companies already had an acceptable interest rate providing a profit they were happy with. Then they allowed the salespeople to put their own share on top of it without telling the buyer that's what was happening.
Ultimately it's been decided that's not how things should be done, because greedy people got too greedy.
In this case the finance companies already had an acceptable interest rate providing a profit they were happy with. Then they allowed the salespeople to put their own share on top of it without telling the buyer that's what was happening.
Ultimately it's been decided that's not how things should be done, because greedy people got too greedy.
Forester1965 said:
Caddyshack said:
Not sure how I feel about this.
We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
How would you feel if you paid double the available interest rate because the salesman witheld it to line their own pocket?We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
Many of the letter senders will still walk in to the dealerships and not think they have just soured the nice relationship they had with the sales people.
OddCat said:
Sheepshanks said:
I always take PCP to get discounts then Withdrew from them - can I still claim?
I did let one run, but that was 0%. I guess somewhere in the deal that must have been funded. Shall I whack in a claim for that?
You're funny I did let one run, but that was 0%. I guess somewhere in the deal that must have been funded. Shall I whack in a claim for that?
Forester1965 said:
It's not about lazy, it's about being fair. Not everybody is equipped or wants to haggle with people who are trained and paid to do it against them.
In this case the finance companies already had an acceptable interest rate providing a profit they were happy with. Then they allowed the salespeople to put their own share on top of it without telling the buyer that's what was happening.
Ultimately it's been decided that's not how things should be done, because greedy people got too greedy.
This. It's amazing how many will argue against it, despite it already being decided that the practice was underhand.In this case the finance companies already had an acceptable interest rate providing a profit they were happy with. Then they allowed the salespeople to put their own share on top of it without telling the buyer that's what was happening.
Ultimately it's been decided that's not how things should be done, because greedy people got too greedy.
I have always tended to haggle like mad with cars (and saved a fortune ) but can also see how unfair this is for those who don't. Effectively you end up with a crappy industry where noone is treated fairly on something of such high value
Forester1965 said:
Totally that. I enjoy buying/selling, but I also know most people don't. They're often like lambs to the slaughter.
I enjoy it too TBH.But it does seem horrible that salespeople looks at customers and know instinctively which ones to fleece the most.
My daughter's are petrol heads but refuse to deal with dealerships as they're mostly full of tossers. I'd tend to agree bar a very few that I've dealt with. It's almost like dealing with estate agents.
I read this today and I expect the finance companies won't do anything until 2024 when the FCA apply rules.
That said I'll be digging and logging old vehicles I've purchased on PCP as over the years they have all always "made the figures work" as a negotiation point.
Is it paramount you have finance agreements? I have none of these available I expect and will only be able to know dates of ownership?
I guess I could do a SAR to VWFS and Audi finance.
Also how could the refund be subject to any tax when you'd been taxed in the first place on what you overspent?
That said I'll be digging and logging old vehicles I've purchased on PCP as over the years they have all always "made the figures work" as a negotiation point.
Is it paramount you have finance agreements? I have none of these available I expect and will only be able to know dates of ownership?
I guess I could do a SAR to VWFS and Audi finance.
Also how could the refund be subject to any tax when you'd been taxed in the first place on what you overspent?
Caddyshack said:
OddCat said:
Sheepshanks said:
I always take PCP to get discounts then Withdrew from them - can I still claim?
I did let one run, but that was 0%. I guess somewhere in the deal that must have been funded. Shall I whack in a claim for that?
You're funny I did let one run, but that was 0%. I guess somewhere in the deal that must have been funded. Shall I whack in a claim for that?
The dealer gets £1,000 either way. He either gets £1,000 more for the car or he gets £1,000 as a finance broker.
You either get £1,000 off the car or you get 0% finance worth £1,000 relative to the normal rate.
You can't have the £1,000 off the car AND the 0% finance. Obviously.
Caddyshack said:
Not sure how I feel about this.
We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
The practice was outlawed in 2021. Doesnt appear to have caused dealerships to close and it is the finance companies that will have to pay. VAG finance makes billions every year. We are all happy when we are granted the finance and strike a good deal - the sales guys have a living to make and we agree the deal.
Who will end up paying the cost long term? What happens to the sales people?
Forester1965 said:
How would you feel if you paid double the available interest rate because the salesman witheld it to line their own pocket?
Ultimately, a deal was put in front of an adult. That adult made a decision to accept that deal. Nothing was 'hidden', all the figures were there in black and white. Where do you stop with this logic? If someone paid £20,000 for a car a decade ago and there could have been £1,000 discount had they haggled, should we compensate them? After all, the salesman withheld it 'to line their own pocket'.
Forester1965 said:
It's not about lazy, it's about being fair. Not everybody is equipped or wants to haggle with people who are trained and paid to do it against them.
Same question as above. Should we now compensate everyone who could have had a discount on the car but didn't? After all, Not everybody is equipped or wants to haggle with people who are trained and paid to do it against them. Ari said:
Forester1965 said:
It's not about lazy, it's about being fair. Not everybody is equipped or wants to haggle with people who are trained and paid to do it against them.
Same question as above. Should we now compensate everyone who could have had a discount on the car but didn't? After all, Not everybody is equipped or wants to haggle with people who are trained and paid to do it against them. Caddyshack said:
Good point but the genuine salesman is also going to get hammered, if they allowed say £200 profit which might be fair if they have been hammered on the car margin they are still going to get these complaint letters and the regulator will just say to pay the compo on x % of cases even if it was all clearly documented. The general public will send these on every finance deal and see which ones stick, they won’t research what was fair and what was not.
Many of the letter senders will still walk in to the dealerships and not think they have just soured the nice relationship they had with the sales people.
So this is the issue in a nutshell.Many of the letter senders will still walk in to the dealerships and not think they have just soured the nice relationship they had with the sales people.
The motor industry is basically a race to the bottom on price, it is very competitive and customers will walk for £50. So what happens is that very average salespeople discount to get a deal. It is further exacerbated by manufacturers having sometimes unrealistic targets to hit. So if supply > demand discounting happens on the thing you are buying. Happy days for the customer.
Then the slightly greyer area takes over and that's how you pay for it, there's a lot of levers a sales guy can pull and things he can do to put profit back in the deal. Pendragon used to do something called 'high pencing' A button the Finance guy presses that changes a payment from say £190.12, to £190.88. This puts £25 back in to the deal over 48 months. Because that's the level they are at.
The consequences of claiming some interest or commission payments back and the tightening of these regs is that it'll become much harder to negotiate anything off the price of a new or used car, and there will be more transparency in your finance agreement.
Ari said:
Ultimately, a deal was put in front of an adult. That adult made a decision to accept that deal. Nothing was 'hidden', all the figures were there in black and white.
Where do you stop with this logic? If someone paid £20,000 for a car a decade ago and there could have been £1,000 discount had they haggled, should we compensate them? After all, the salesman withheld it 'to line their own pocket'.
The scenarios are different. Where do you stop with this logic? If someone paid £20,000 for a car a decade ago and there could have been £1,000 discount had they haggled, should we compensate them? After all, the salesman withheld it 'to line their own pocket'.
Your own example is the price of the vehicle. The 'list price' (starting point) of a new or used car is known in advance. You can choose to or not to haggle, that is you prerogative.
In this case, it's not the price of the vehicle, it's the price of the finance. The list price of the finance (the interest rate), was hidden. The salesman was free to create their own 'list' price. The consumer had no way of knowing whether they were paying at, above or below the list price set by the finance provider.
That is sharp practice in consumer sales and was rightly banned.
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