Car Dealers & Finance
Discussion
Dan W. said:
Oh of course, Just every now and then i felt a bit sorry for the customer but if they want on the finance ladder no other choices i suppose.
Like you say its good for those who are able to do it and get their credit back to a decent position. and the rates drop
I once got a bloke accepted at 48% using Evolution on a Merc GL, the worst bit was he had a 7k deposit! I tried explaining to him many many times that he could actually buy a fairly nice car with that deposit and not have a £600 payment each month but he just wasn't having it. It was the GL or nothing. Like you say its good for those who are able to do it and get their credit back to a decent position. and the rates drop
Edited by 123DWA on Friday 20th August 10:10
Richard-390a0 said:
There's no money in selling cars so the add-ons like finance, life shine, gap insurance etc etc is where the sales commission is these days.
Also, just to highlight this. You're partially right.The salesman may earn more from selling the products, but for the dealer, the money is in the 'metal' the add-ons are just a bit of extra topup revenue.
Some finance does pay a good commission, but you run the risk that the customer will pay off early and you get the commission clawed back so running a business based on that is a fools errand. Also the so called 'Rate for Risk' lenders pay bugger all in commission. Sometimes £50-£100, sometimes they charge the dealer!
piker said:
Is it me? or has the world gone mad?
Thought I would share my recent experiences going around the car dealers and applying for HP finance. First of all I have a average credit rating so was not expecting to get the so called competitive rates offered by the mainstream lenders used in dealerships. Currently with Toyota Finance and looking to pay the settlement figure before I take out more finance. Getting to the point - been offered finance deals at 16% - 18% APR on a car cost of approx £10,500 and willing to put down min 10% deposit or maybe 20% if that strengthen the deal offered. What amazes me is that car dealers just expect you to sign up there and then without me the customer looking at the terms and the likely costs over the term of the agreement, in my case it was going to cost me anything from £3.5k to £4K over a 5 year term in interest alone! worth mentioning I would never go 5 years anyway would always settle early as I change cars every 2/3 years. Being in my late 50's I like to think I can smell a bad deal from miles away so politely turned down their offers and the dealers look at you as if you just killed someone, they cannot understand why I said no, does that mean then that most folk just sign up on the dotted line and dolt think about the true cost of how much that car is going to cost? Have car dealers just had it too good?
Anyone else had similar experiences?
The way finance is sold is shocking and sadly the FCA that is supposed to police the industry is useless. They seem to have no idea what consumers do or don’t understand, so enable car companies to present finance in all sorts of confusing and misleading ways, as long as things are presented consistently. Thought I would share my recent experiences going around the car dealers and applying for HP finance. First of all I have a average credit rating so was not expecting to get the so called competitive rates offered by the mainstream lenders used in dealerships. Currently with Toyota Finance and looking to pay the settlement figure before I take out more finance. Getting to the point - been offered finance deals at 16% - 18% APR on a car cost of approx £10,500 and willing to put down min 10% deposit or maybe 20% if that strengthen the deal offered. What amazes me is that car dealers just expect you to sign up there and then without me the customer looking at the terms and the likely costs over the term of the agreement, in my case it was going to cost me anything from £3.5k to £4K over a 5 year term in interest alone! worth mentioning I would never go 5 years anyway would always settle early as I change cars every 2/3 years. Being in my late 50's I like to think I can smell a bad deal from miles away so politely turned down their offers and the dealers look at you as if you just killed someone, they cannot understand why I said no, does that mean then that most folk just sign up on the dotted line and dolt think about the true cost of how much that car is going to cost? Have car dealers just had it too good?
Anyone else had similar experiences?
Even the standard finance training given to most dealers/those qualified to sell finance is poor, as it’s the kind of teaching that presents approved ways of selling things, rather than helping dealers to understand the mechanics of finance, so they could present finance transparently and better answer customer questions.
What makes the situation worse is that drivers don’t seem to do any of their own research/sums or even think about the concept of owning a car at the end/having to give it back in monetary terms.
If people thought about buying and owning a car as being a big deposit and then £0 monthly payments that would really help them to compare paying cash vs the cost of finance/leasing.
DodgyGeezer said:
Brainpox said:
Talking to 'non car' people at work it certainly seems like people are quite willing to sign anything without giving it much thought. But I think this applies more to younger people who have the opportunity to borrow a new or nearly new car, rather than have to settle for an older car that might have something wrong with it.
Most recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Indeed this ^^ Or bugger the apr, what are the monthlies? Only thing that matters is what you're paying each monthMost recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Sheepshanks said:
DodgyGeezer said:
Brainpox said:
Talking to 'non car' people at work it certainly seems like people are quite willing to sign anything without giving it much thought. But I think this applies more to younger people who have the opportunity to borrow a new or nearly new car, rather than have to settle for an older car that might have something wrong with it.
Most recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Indeed this ^^ Or bugger the apr, what are the monthlies? Only thing that matters is what you're paying each monthMost recently one girl who just started with us initially wanted to buy a car on hire purchase with a budget of £180 a month. She had a car to trade in and was looking round at what she could get.
Next time I spoke to her she said she had instead got a lease deal on a new A1 for her car + £260 a month. So she went 40% over budget for three years, with limited mileage allowance, and will have no car at the end of it.
There was no thought about whether it was a good idea or not. There was a shiny car in the showroom, which she could afford, and that was all that mattered.
Nah, bloody yoof of today, no idea, etc etc, grumble grumble
123DWA said:
I once got a bloke accepted at 48% using Evolution on a Merc GL, the worst bit was he had a 7k deposit! I tried explaining to him many many times that he could actually buy a fairly nice car with that deposit and not have a £600 payment each month but he just wasn't having it. It was the GL or nothing.
Pah. That’s nothing. Borrow £1,300, repay £3,640 over 18 months with 443% APR!Edited by 123DWA on Friday 20th August 10:10
My V70 was £1,300 and cost me -£150 per month overall compared with a logbook loan of +£202 per month…
The thing that gets me is that many people don’t finance a car - and sometimes accept awful rates - because they have to. They think they need/deserve a brand new car/overpriced supersized Mercedes/must have Black Edition trim etc.
If it’s a conscious choice to spend a lot that’s fine, but my worry is that many drivers don’t realise the overall cost of how they pay for cars.
really great response to my original question keep em coming.
Had to laugh though went I went into dealers discuss the proposal and they wanted to add on all these extras like gap insurance, paintwork protection, warranty etc this adding hundreds of pounds to the final price. I just said no no no just want to borrow for the sticker price maybe its my northern, Yorkshire background that puts the fur on my back stand up.
Had to laugh though went I went into dealers discuss the proposal and they wanted to add on all these extras like gap insurance, paintwork protection, warranty etc this adding hundreds of pounds to the final price. I just said no no no just want to borrow for the sticker price maybe its my northern, Yorkshire background that puts the fur on my back stand up.
piker said:
really great response to my original question keep em coming.
Had to laugh though went I went into dealers discuss the proposal and they wanted to add on all these extras like gap insurance, paintwork protection, warranty etc this adding hundreds of pounds to the final price. I just said no no no just want to borrow for the sticker price maybe its my northern, Yorkshire background that puts the fur on my back stand up.
Ah yes the extras, Usually main dealer add on's i miss those days lol.Had to laugh though went I went into dealers discuss the proposal and they wanted to add on all these extras like gap insurance, paintwork protection, warranty etc this adding hundreds of pounds to the final price. I just said no no no just want to borrow for the sticker price maybe its my northern, Yorkshire background that puts the fur on my back stand up.
Also ask them what commission they are earning from the finance as well and to show you.
piker said:
really great response to my original question keep em coming.
Had to laugh though went I went into dealers discuss the proposal and they wanted to add on all these extras like gap insurance, paintwork protection, warranty etc this adding hundreds of pounds to the final price. I just said no no no just want to borrow for the sticker price maybe its my northern, Yorkshire background that puts the fur on my back stand up.
You seem fixated on dealer bashing here for them doing their job..........Had to laugh though went I went into dealers discuss the proposal and they wanted to add on all these extras like gap insurance, paintwork protection, warranty etc this adding hundreds of pounds to the final price. I just said no no no just want to borrow for the sticker price maybe its my northern, Yorkshire background that puts the fur on my back stand up.
It's not their fault that your credit history puts you in the "sub-prime" market. Joe Bloggs is getting 5/6/7.9% rates, and yes it's higher than a loan, but it's convenient.
As said before - there is a glaringly obvious reason you're not getting these rates
RoVoFob said:
Pah. That’s nothing. Borrow £1,300, repay £3,640 over 18 months with 443% APR!
My V70 was £1,300 and cost me -£150 per month overall compared with a logbook loan of +£202 per month…
The thing that gets me is that many people don’t finance a car - and sometimes accept awful rates - because they have to. They think they need/deserve a brand new car/overpriced supersized Mercedes/must have Black Edition trim etc.
If it’s a conscious choice to spend a lot that’s fine, but my worry is that many drivers don’t realise the overall cost of how they pay for cars.
Log book loans are not in any way related to car finance.My V70 was £1,300 and cost me -£150 per month overall compared with a logbook loan of +£202 per month…
The thing that gets me is that many people don’t finance a car - and sometimes accept awful rates - because they have to. They think they need/deserve a brand new car/overpriced supersized Mercedes/must have Black Edition trim etc.
If it’s a conscious choice to spend a lot that’s fine, but my worry is that many drivers don’t realise the overall cost of how they pay for cars.
They are used by people who can not borrow on an unsecured basis, so need to use the car as security. By definition this means they are very sub prime, so it would be reasonable to expect significantly higher rates of interest.
nikaiyo2 said:
Log book loans are not in any way related to car finance.
They are used by people who can not borrow on an unsecured basis, so need to use the car as security. By definition this means they are very sub prime, so it would be reasonable to expect significantly higher rates of interest.
I realise they’re different, but they are still a type of finance that is secured against a car. Sounds relevant to mention it to me, to give context to the full scale of APR charges on finance that is linked to a car…They are used by people who can not borrow on an unsecured basis, so need to use the car as security. By definition this means they are very sub prime, so it would be reasonable to expect significantly higher rates of interest.
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