Car finance - hidden commission payments

[wargriff]

OddCat said:

ashleyman said:

So does that mean the dealer would have been earning 5k in commission from the finance co?

No where near.

If this was a new car, the dealer would of recieved a small percentage of the funded balance, depending on size of dealership. 2-6%. this would then be debited back within 3 months, if settled early.

The £5000 discount would have been from the manufacturer/finance company. So only available as a deposit contribution.

There certainly would not have been a £5000 commission payable to the dealer, the APR would of been massive, and not likely to be taken by even the most dense in the community.

[John3l]

Further update from VWFS yesterday.

[ashleyman]

John3l said:

Further update from VWFS yesterday.

Was yours a new or used car?

[John3l]

ashleyman said:

John3l said:

Further update from VWFS yesterday.

Was yours a new or used car?

Used.

[jonwm]

I remember buying a car from a main dealer in Sunderland, my first Leon cupra R, did the deal as was traveling up from the midlands on the phone and paid £100 deposit, driving home looked at the paperwork and the APR was 20 something percent, maybe a bit more maybe less but I was told 6, rang them up and was told it was the "flat rate". Never signed finance on the say so of a salesman since I was going then and should have realised.

[fourstardan]

I find the logic of arguing about dealer contributions on cars and still making claims for DCA's rather strange.

It surely just means whoever had a DCA paid less overall in the potential claim.

From memory you could only use particular finance products when receiving said "reductions".

[OddCat]

fourstardan said:

I find the logic of arguing about dealer contributions on cars and still making claims for DCA's rather strange.

It surely just means whoever had a DCA paid less overall in the potential claim.

From memory you could only use particular finance products when receiving said "reductions".

In the normal world then, yes, moaning about the finance broker getting a £2,000 commission when you got £5,000 off the car would be mental. To unwind that you'd end up PAYING £3,000.

But we don't live in a normal world any more. We live in an entitled world where moral hazard no longer exists, no one has to be savvy any more to get the best deals, everyone thinks they can have the penny and the bun, and people will sell their own granny for a bit of compo at every opportunity.

No doubt this comment will go down like a cup of cold sick among the claimants on here

[Random_Person]

First response from Kia re my 5 claims. One didn't, one did. The one that did has been put into a further investigation. Guess they will offer me a lowball amount to sign as complete and get money early?

Still no acknowledgement from Novuna after 5 weeks.

[djc206]

OddCat said:

In the normal world then, yes, moaning about the finance broker getting a £2,000 commission when you got £5,000 off the car would be mental. To unwind that you'd end up PAYING £3,000.

But we don't live in a normal world any more. We live in an entitled world where moral hazard no longer exists, no one has to be savvy any more to get the best deals, everyone thinks they can have the penny and the bun, and people will sell their own granny for a bit of compo at every opportunity.

No doubt this comment will go down like a cup of cold sick among the claimants on here

bks would it. If I sign up to receive a £5k discount and it turns out the dealer has nicked £2k of that for himself through some sneaky and illegal method then I’ve lost £2k, I’ve not gained £3k because the deal was sold as £5k off. You don’t have to like it but this isn’t about fecklessness it’s about dealers doing dodgy st and being caught out by the rather late to the party FCA.

The dealers took the moral risk in doing something quite clearly immoral and also outwith the rules they were bound by. That risk hasn’t paid off, tough titties

[The Rotrex Kid]

It is very, very unlikely that a dealer will have been paid under a DCA for a finance co subsidised deal. They are set rates, set deposit contribution and set commission payments in almost every one I’ve ever come across.

Don’t hold your breath for getting any money back if you had one of these.

djc206 said:

That risk hasn’t paid off, tough titties

TBH, it has, the dealer will very unlikely have any kind of comeback from this, any payments will be made by the finance companies. The dealers banked the commissions years ago.

[Hugo Stiglitz]

asfault said:

I distinctly remember seeing the sales managers screen when they could just change the interest rate on a deal. usually when the customer had said their budget was say £200 per month (up to)...little sales bullst in brackets there. and if the deal cme in at 180 they just added more interest to get a bigger kickback from the finance company.

if their budget was £200...up to....

and it came in at £220 etc they upped the term from 4 years to 5..

Wow. Absolutely pondlife.

I remember seeing an ad recently that said 'car can only be purchased using our finance' on autotrader

[djc206]

The Rotrex Kid said:

It is very, very unlikely that a dealer will have been paid under a DCA for a finance co subsidised deal. They are set rates, set deposit contribution and set commission payments in almost every one I’ve ever come across.

Don’t hold your breath for getting any money back if you had one of these.

djc206 said:

That risk hasn’t paid off, tough titties

TBH, it has, the dealer will very unlikely have any kind of comeback from this, any payments will be made by the finance companies. The dealers banked the commissions years ago.

On your first point of course, it’s almost certainly a hypothetical but the point stands if such a situation did exist. The sort of deals that involve that level of manufacturer subsidy are almost always fixed APR with some fairly strict deposit and eligibility criteria. In recent times possibly also involve a claw back of the incentive should the customer bail on the deal after just a few weeks as well.

On your second point of course. The finance houses clearly actively encouraged dodgy behaviour to flog more units. They’re going to cop the bill not the little guy who was encouraged to act on their behalf for a small cut of the illicit gains. That’s fine, this sort of widespread action isn’t the product of isolated piss taking, its wholesale.

[sugerbear]

Now had responses to both my VW claims.

One was subject to DCA and one was not. But they are pausing the claim until September as per the FCA.

The car subject to DCA was purchased at the main dealership in central Essex.

Edited by sugerbear on Thursday 21st March 07:36

[alscar]

sugerbear said:

Now had responses to both my VW claims.

One was subject to DCA and one was not. But they are pausing the claim until September as per the FCA.

The car subject to DCA was purchased at the main dealership in central Essex.

Edited by sugerbear on Thursday 21st March 07:36

Did on the DCA claim they say they had referred it to their complaints dept ?
Used car or new ?

[fido]

axel1990chp said:

I had a physical letter arrive in the post yesterday from Black Horse, requesting all the information I have already given them in the email to be sent to them via email…

Strangely enough, it is addressed to the address in question, states me by name in the letter, and also references my vehicle and registration on it too.

Are they trying to pull a fast one and hope people “fail to respond to our correspondence” so they can worm out of any potential future claims?

I’ll send it this eve, just to be sure, again.

I sent off an e-mail a week ago but still haven't had a reply. If they do this to me I will reply and state that all the information you request was provided on the e-mail dated X. And send another e-mail cc'ing the FSA with a scan of their letter. On a roll this year with claims / refunds so bring it on!

[sugerbear]

alscar said:

sugerbear said:

Now had responses to both my VW claims.

One was subject to DCA and one was not. But they are pausing the claim until September as per the FCA.

The car subject to DCA was purchased at the main dealership in central Essex.

Edited by sugerbear on Thursday 21st March 07:36

Did on the DCA claim they say they had referred it to their complaints dept ?
Used car or new ?

Used car (one year old at the time of purchase).

This is the response from VW - there is still a chance DCA didnt apply as they continue to investigate.

“ Based on our initial review we believe a Discretionary Commission Arrangement may apply to your agreement and as such the pause applies to your complaint. If our investigations find a Discretionary Commission Arrangement does not apply to your agreement we will respond to your complaint within the normal 8 week timeline.

Based on current FCA instructions the pause on DCA complaints will be for a period of 37 weeks until 25 September 2024 and we are not required to respond to DCA related complaints until after this date, at which point either a further pause may apply or the normal 8 week timeframe will start.

Please be assured that during this time we will investigate your complaint and collect information to support us in reaching a resolution. There’s no need for you to contact us again, we’ll contact you as soon as we are able to share the outcome of our investigation.”

[alscar]

sugerbear said:

Used car (one year old at the time of purchase).

This is the response from VW - there is still a chance DCA didnt apply as they continue to investigate.

“ Based on our initial review we believe a Discretionary Commission Arrangement may apply to your agreement and as such the pause applies to your complaint. If our investigations find a Discretionary Commission Arrangement does not apply to your agreement we will respond to your complaint within the normal 8 week timeline.

Based on current FCA instructions the pause on DCA complaints will be for a period of 37 weeks until 25 September 2024 and we are not required to respond to DCA related complaints until after this date, at which point either a further pause may apply or the normal 8 week timeframe will start.

Please be assured that during this time we will investigate your complaint and collect information to support us in reaching a resolution. There’s no need for you to contact us again, we’ll contact you as soon as we are able to share the outcome of our investigation.”

Interesting - all the companies involved /affected appear to be treating each contact somewhat differently.
I guess in reality until the FCA review is done and dusted its more a case of just ensuring your initial email is sent and then as ML said sit back and wait for proper conversation's.
MSE published an update email recently which assume people have seen.

[wargriff]

djc206 said:

OddCat said:

In the normal world then, yes, moaning about the finance broker getting a £2,000 commission when you got £5,000 off the car would be mental. To unwind that you'd end up PAYING £3,000.

But we don't live in a normal world any more. We live in an entitled world where moral hazard no longer exists, no one has to be savvy any more to get the best deals, everyone thinks they can have the penny and the bun, and people will sell their own granny for a bit of compo at every opportunity.

No doubt this comment will go down like a cup of cold sick among the claimants on here

bks would it. If I sign up to receive a £5k discount and it turns out the dealer has nicked £2k of that for himself through some sneaky and illegal method then I’ve lost £2k, I’ve not gained £3k because the deal was sold as £5k off. You don’t have to like it but this isn’t about fecklessness it’s about dealers doing dodgy st and being caught out by the rather late to the party FCA.

The dealers took the moral risk in doing something quite clearly immoral and also outwith the rules they were bound by. That risk hasn’t paid off, tough titties

The deal you get, would still be £5000 off the price of the car. The commission payment to the dealer is seperate. So you dont only get £3000 off.
What was said was, if the deal is done without the commission, tto the dealer and no discount applied, the saving would be the £2000 commission. And you would have to pay £3000 extra overall.
Sometimes, the dealer earning a commission allows a better deal to be offered to the buyer.

[djc206]

wargriff said:

The deal you get, would still be £5000 off the price of the car. The commission payment to the dealer is seperate. So you dont only get £3000 off.
What was said was, if the deal is done without the commission, tto the dealer and no discount applied, the saving would be the £2000 commission. And you would have to pay £3000 extra overall.
Sometimes, the dealer earning a commission allows a better deal to be offered to the buyer.

It’s not separate because the interest rate is being adjusted to claw back that incentive from the customer to pass on to the dealer as commission. In that example they’re giving with one hand and taking with the other.

[JimmyConwayNW]

Hugo Stiglitz said:

Wow. Absolutely pondlife.

I remember seeing an ad recently that said 'car can only be purchased using our finance' on autotrader

To be fair that will just mean no external third party brokers of your own choosing. Many brokers only make money from higher rates anyway which is inkeeping with the complaints here.

My own car sales business won't work with external brokers. We have direct lenders and brokers, we have access to all the major and lots of lesser known companies. And we know the quality and are happy to partner with those companies.

These shower of st call centre finance companies often promise the world, fail to deliver and then its the dealer getting it in the neck.

Its like being Joe bloggs plumbing and being the best in area, then subbing out to unknown workmen many of who are rogues. Just means you get the headache.