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 ?
On new cars, yes - finance deposit contributions are typically made by the captive finance provider such as VWFS, BMW FS, etc and are often linked to quarterly campaign incentives/discounts/APRs on specific models or trim levels.Did people really only get a discount if they took the finance and people who paid 'cash' paid more ?
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.
Here's an example of what I think is good practice - a new car buying service which breaks down the elements of the deal for the buyer to see.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.
https://www.drivethedeal.com/SpecialOffers.aspx - let's pick a mid range A3 which is a fairly typical white goods aspirational car for the masses.
A savvy cash buyer can easily see the difference in discount between buying as a cash deal (£1250 off) and taking Audi Finance at 9.9% (£3250 off), and make their choice accordingly.
The key difference here (and the crux of the current investigation) is that Audi Finance will offer their published 9.9% rate to all eligible applicants...free from dealer interference bumping it up to say 13.9% to earn an undisclosed additional commission & the dealer not being transparent to the buyer about this aspect of the deal.
|https://thumbsnap.com/euRB3DJE[/url]Finance companies warned to keep adequate capital in case of settlements
https://cardealermagazine.co.uk/publish/fca-warns-...
https://cardealermagazine.co.uk/publish/fca-warns-...
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