Car finance - hidden commission payments
Discussion
OddCat said:
To those who actually arranged car finance in a dealership, were these "you can have a discount but only if you take the finance" deals real ?
Did people really only get a discount if they took the finance and people who paid 'cash' paid more ?
Yes i bought an M240 and the price was 5k less if I took finance.Did people really only get a discount if they took the finance and people who paid 'cash' paid more ?
ashleyman said:
VWFS (responsible for 3 of my loans) have come back today saying they need more time and will respond within 30 days.
With those being brand new on standard rates I can’t imagine there will be DCA but guess I’ll have to wait and see for sure.
The response to your enquiry will either advise that the commission model applicable to your agreement was fixed, and therefore not subject to any further action, or that the model was a Discretionary Commission Arrangement, in which case we will open a complaint on your behalf and our response will be an acknowledgement of your complaint.
Same here - 5 loan agreements. With those being brand new on standard rates I can’t imagine there will be DCA but guess I’ll have to wait and see for sure.
The response to your enquiry will either advise that the commission model applicable to your agreement was fixed, and therefore not subject to any further action, or that the model was a Discretionary Commission Arrangement, in which case we will open a complaint on your behalf and our response will be an acknowledgement of your complaint.
Still nothing from Alphera other than the initial auto reply.
Deep Thought said:
OddCat said:
Deep Thought said:
OddCat said:
Well, hopefully, the FCA will have the good sense to instruct that these things must be netted out on the basis that it was all part of the same deal and you can't have the penny and the bun.
Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
The FCA have been over all that previously, and chose to do nothing.Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
Sheets Tabuer said:
OddCat said:
To those who actually arranged car finance in a dealership, were these "you can have a discount but only if you take the finance" deals real ?
Did people really only get a discount if they took the finance and people who paid 'cash' paid more ?
Yes i bought an M240 and the price was 5k less if I took finance.Did people really only get a discount if they took the finance and people who paid 'cash' paid more ?
OddCat said:
Deep Thought said:
OddCat said:
Deep Thought said:
OddCat said:
Well, hopefully, the FCA will have the good sense to instruct that these things must be netted out on the basis that it was all part of the same deal and you can't have the penny and the bun.
Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
The FCA have been over all that previously, and chose to do nothing.Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
OddCat said:
So with hindsight, rather than paying the interest rate you did, would you rather have used your own money, or got a loan elsewhere, and paid £5k more for the car ?
I bought my M240 on a Novuna finance agreement and had to do so in order to get the price as agreed - i.e had I not have taken that finance out the price would have been higher.I paid off the finance within 7 days however it was taken out and the car sold through it.
Deep Thought said:
OddCat said:
Deep Thought said:
OddCat said:
Deep Thought said:
OddCat said:
Well, hopefully, the FCA will have the good sense to instruct that these things must be netted out on the basis that it was all part of the same deal and you can't have the penny and the bun.
Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
The FCA have been over all that previously, and chose to do nothing.Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
You wouldn't get them saying "the bloke was giving away bananas but they did nothing about it".
So there was a sub optimal situation that they decided to do nothing about ? Otherwise they wouldn't have been looking at it in the first place ? So what was the bit they were worried about and why ?
They must have realised money was being made on the finance to offset the discount ? Quid pro quo ?
Random_Person said:
OddCat said:
So with hindsight, rather than paying the interest rate you did, would you rather have used your own money, or got a loan elsewhere, and paid £5k more for the car ?
I bought my M240 on a Novuna finance agreement and had to do so in order to get the price as agreed - i.e had I not have taken that finance out the price would have been higher.I paid off the finance within 7 days however it was taken out and the car sold through it.
Presumably the dealer in this case received neither the higher value for the car nor the finance commission (which, if paid, would surely have been clawed back).
Not judging. Just trying to see all angles....
OddCat said:
Random_Person said:
OddCat said:
So with hindsight, rather than paying the interest rate you did, would you rather have used your own money, or got a loan elsewhere, and paid £5k more for the car ?
I bought my M240 on a Novuna finance agreement and had to do so in order to get the price as agreed - i.e had I not have taken that finance out the price would have been higher.I paid off the finance within 7 days however it was taken out and the car sold through it.
Presumably the dealer in this case received neither the higher value for the car nor the finance commission (which, if paid, would surely have been clawed back).
Not judging. Just trying to see all angles....
ashleyman said:
So does that mean the dealer would have been earning 5k in commission from the finance co?
We have no idea what the commission model was for dealerships and finance. Maybe the finace company offered a bonus if a dealership hit a certain volume of finance deals. No problem with that as it would be a profit sharing agreement.It is no difference to a dealer having a commission model that gives them a 100k bonus from the manufacturer if they sell 1000 cars a year and towards the end of the year you have sold 990 cars and choose to discount ten cars to ensure they hit the target.
So if I have 30,000 in the bank, walk into a dealership and they say "take the finance and you can have 5k off" then I am well within the my rights to take that deal / finance and under the terms of the agreement pay that off within 14 days. That is within the terms of the finance agreement and I would be dumb to refuse it.
Deep Thought said:
OddCat said:
Deep Thought said:
OddCat said:
Well, hopefully, the FCA will have the good sense to instruct that these things must be netted out on the basis that it was all part of the same deal and you can't have the penny and the bun.
Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
The FCA have been over all that previously, and chose to do nothing.Otherwise, people paying cash were disadvantaged in the sense that they were not told you'll have to take finance at 8% in order to get the discount - but you'll get, say, 3% of that back as a lump sum later. In which case some people might have chosen to do that.
OddCat said:
If your plan all along was to clear the finance straight away, and you didn't disclose that intention, could it be argued that you obtained the discount under false pretences ?
Presumably the dealer in this case received neither the higher value for the car nor the finance commission (which, if paid, would surely have been clawed back).
Not judging. Just trying to see all angles....
I'm not sure - all I knew was I wanted the car at the best price, and the way to get that was through the PCP offered only. I also had to buy a compulsory warranty, which I did not want at all, but they would not sell the car without it. I ended up managing to get that down to £300 rather than the £1200 it was supposed to be. However, it was one of those spoof third party warranties that cover nothing, and have a phone number that is never answered. (If you look at online reviews they have something like 1000 negative reviews all saying the same thing).Presumably the dealer in this case received neither the higher value for the car nor the finance commission (which, if paid, would surely have been clawed back).
Not judging. Just trying to see all angles....
I guess that the garage got their "cut" - the finance was still taken out after all. Once cleared with my 2.7% bank loan a few days later, it was still cleared with the full amount payable being paid off, so however the intricacies work, I am sure everyone got their bonuses.
Its like insurance, a complete farce with a load of hidden truths and front facing deflections to make sure the customer is fleeced and all else involved get as much cash in the bank as possible.
Random_Person said:
I guess that the garage got their "cut" - the finance was still taken out after all. Once cleared with my 2.7% bank loan a few days later, it was still cleared with the full amount payable being paid off, so however the intricacies work, I am sure everyone got their bonuses.
If the arrangement had a 'discretionary commission' then that would depend on you paying the interest for its full period.It's a numbers game I suppose. Some people would be to lazy to refinance immediately like you did. You were savvy - although being savvy is no longer necessary in life as the way things nose work, the lazy and feckless will be bailed out anyway at some point regardless.
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