Are the wheels about to fall of car finance?
Discussion
DonkeyApple said:
Are you actually trying to say that a product cannot be sold unless the financial product is sold by the same entity?
No. However car manufacturing and car finance are that intrinsically linked, you'd basically have to pull apart the current system and start again. So therefore its not going to happen.If we want to talk about a little nirvana fantasy world, then yes, i'll humour you, but not in the real world, nope, not happening.
DonkeyApple said:
And re the point above, how on earth can you justify salesmen incentivised by commissions or commissions going to the 'house'?
Because they "sell" and the best way to motivate salespeople is to put them on a commission for products sold? I'm not saying they "must" be sold on a commission but that car sales / finance are that closely linked it would be nigh on impossible to separate the two.
DonkeyApple said:
We're simply aren't in the 20th century any longer and practices that have been halted post Crash in other fields should not be allowed to continue in the car industry.
Agreed - however the FCA dont seem keen to do "anything" that might rock the boat at all, therefore your "take it apart and start again" solution isnt going to hold much water is it?Yours isnt a real world solution, sorry.
Edited by daemon on Monday 25th September 20:48
It would be incredibly easy to separate the two. It would merely take a change in regulation.
The finance arms of each manufacturers would simply become specialist lending banks to the car industry not just one manufacturer. At which point the vast amount of comms they pay away to line pockets would due to the competitive environment be sealed in price competition.
And the manufacturing side? Do you genuinely think they don't make very healthy profits on each unit? Or are you getting confused by how they choose to funnel the revenues away from points of higher taxation?
Splitting the two parts backnout will create proper price competition on both sides.
The reality is that it would be a pretty easy split to make andnits been made in other industries where their practices have ceased to favour the consumer.
And commission is not the best way to incentivise the sale of financial products. The entire world now recognises this after the last decade. All it does it proliferate and reward bad practice and higher costs to the consumer.
Sure, some staff wouldn't like the idea of not receiving comms but that's kind of the point. You get rid of them and they are replaced with people who don't respond to sanctioned bribes that cost the consumer.
The finance arms of each manufacturers would simply become specialist lending banks to the car industry not just one manufacturer. At which point the vast amount of comms they pay away to line pockets would due to the competitive environment be sealed in price competition.
And the manufacturing side? Do you genuinely think they don't make very healthy profits on each unit? Or are you getting confused by how they choose to funnel the revenues away from points of higher taxation?
Splitting the two parts backnout will create proper price competition on both sides.
The reality is that it would be a pretty easy split to make andnits been made in other industries where their practices have ceased to favour the consumer.
And commission is not the best way to incentivise the sale of financial products. The entire world now recognises this after the last decade. All it does it proliferate and reward bad practice and higher costs to the consumer.
Sure, some staff wouldn't like the idea of not receiving comms but that's kind of the point. You get rid of them and they are replaced with people who don't respond to sanctioned bribes that cost the consumer.
DonkeyApple said:
It would be incredibly easy to separate the two. It would merely take a change in regulation.
The finance arms of each manufacturers would simply become specialist lending banks to the car industry not just one manufacturer. At which point the vast amount of comms they pay away to line pockets would due to the competitive environment be sealed in price competition.
And the manufacturing side? Do you genuinely think they don't make very healthy profits on each unit? Or are you getting confused by how they choose to funnel the revenues away from points of higher taxation?
Splitting the two parts backnout will create proper price competition on both sides.
The reality is that it would be a pretty easy split to make andnits been made in other industries where their practices have ceased to favour the consumer.
And commission is not the best way to incentivise the sale of financial products. The entire world now recognises this after the last decade. All it does it proliferate and reward bad practice and higher costs to the consumer.
Sure, some staff wouldn't like the idea of not receiving comms but that's kind of the point. You get rid of them and they are replaced with people who don't respond to sanctioned bribes that cost the consumer.
Well we could debate it all day but we're clearly not going to change each others minds - you've longstanding experience of the finance industry which gives you a perspective of why you think it would work, i've longstanding experience of the motor industry, the IT industry and the banking IT industry which gives me a perspective on why i think it wont work, plus its never happening anyway and its not even on anyones radar as a serious option, so lets agree to disagree.The finance arms of each manufacturers would simply become specialist lending banks to the car industry not just one manufacturer. At which point the vast amount of comms they pay away to line pockets would due to the competitive environment be sealed in price competition.
And the manufacturing side? Do you genuinely think they don't make very healthy profits on each unit? Or are you getting confused by how they choose to funnel the revenues away from points of higher taxation?
Splitting the two parts backnout will create proper price competition on both sides.
The reality is that it would be a pretty easy split to make andnits been made in other industries where their practices have ceased to favour the consumer.
And commission is not the best way to incentivise the sale of financial products. The entire world now recognises this after the last decade. All it does it proliferate and reward bad practice and higher costs to the consumer.
Sure, some staff wouldn't like the idea of not receiving comms but that's kind of the point. You get rid of them and they are replaced with people who don't respond to sanctioned bribes that cost the consumer.
And there we go... New car market has gone off the boil, new car sales down, disaster averted - no children or puppies got hurt.
http://www.bbc.co.uk/news/business-41773715
http://www.bbc.co.uk/news/business-41773715
Interestingly, for all the "consumers will just keep on consuming - we need to protect them from themselves" hand wringing that has went on - it turns out the market is going off the boil because people are wary of the impact of brexit, potential rising interest rates, and the impact of the governments very unclear signals about its air quality plans.
So they havent just kept on spending
So they havent just kept on spending
daemon said:
And there we go... New car market has gone off the boil, new car sales down, disaster averted - no children or puppies got hurt.
http://www.bbc.co.uk/news/business-41773715
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year. http://www.bbc.co.uk/news/business-41773715
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
legless said:
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year.
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
It could be that the Sept 2016 figures dipped for VAG as a consequence of "dieselgate" which would make the Sept 17 year on year figure look better.Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
legless said:
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year.
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Possibly but Ford currently have a lot of 0% deals on offer Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Could be the other side of the coin , ie VAG group reaping the return custom of good deals they had 3 years ago (When I took mine out) and people taking out new deals as they cant afford the final payment.
Having had a poke around in a showroom the other week whilst mulling over a replacement for my Polo, Ford have deals on but they are not very good value.
The new Fiesta in general in terms of drive, build quality look and feel a step up from VW at the moment. The new Polo launching in Jan can't come soon enough IMHO.
I do wonder, driving around Manchester, how much Uber has propped up sales of cars from the likes of Mercedes and VW.
Birmingham is very much weighted much more towards Ford drivers than Manchester so perhaps this skews my view of the world but there are an awful lot of 1-2 year old Merc's knocking around in Manchester at the moment.
Sa Calobra said:
daemon said:
Salesmen are incentivised to sell cars, finance, service packs, insurance policies, etc.
Does this come as a surprise to you?
Which can lead to claims of misselling. Does this come as a surprise to you?
legless said:
daemon said:
And there we go... New car market has gone off the boil, new car sales down, disaster averted - no children or puppies got hurt.
http://www.bbc.co.uk/news/business-41773715
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year. http://www.bbc.co.uk/news/business-41773715
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
liner33 said:
legless said:
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year.
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Possibly but Ford currently have a lot of 0% deals on offer Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Could be the other side of the coin , ie VAG group reaping the return custom of good deals they had 3 years ago (When I took mine out) and people taking out new deals as they cant afford the final payment.
daemon said:
liner33 said:
legless said:
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year.
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Possibly but Ford currently have a lot of 0% deals on offer Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Could be the other side of the coin , ie VAG group reaping the return custom of good deals they had 3 years ago (When I took mine out) and people taking out new deals as they cant afford the final payment.
SteBrown91 said:
daemon said:
liner33 said:
legless said:
Curiously, if you look at the figures in more detail, most of the September decrease is down to an absolute collapse in Ford and Vauxhall sales compared with the previous year.
Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Possibly but Ford currently have a lot of 0% deals on offer Some brands (including VW and SEAT) posted reasonably healthy increases over the previous year.
It's curious. Possibly differences in the PCP incentives?
Could be the other side of the coin , ie VAG group reaping the return custom of good deals they had 3 years ago (When I took mine out) and people taking out new deals as they cant afford the final payment.
HedgeyGedgey said:
Hypothetically, lets say the market for financing cars crashes somehow. How will that effect used car prices, everyone in PCP'd cars will need some wheels. Are the prices of 5 year old cars gonna rocket, or be so low due to demand?
Well thats the problem isnt it? All these people wanting "retribution" against people using PCP to drive cars they clearly cant afford may well find themselves having to pay significantly extra for used cars as supply dries up and those people who would otherwise buy new turn to the used market.I think manufacturers will just evolve their selling model and do whatever they need to to sell cars.
I personally think leasing will replace PCP deals as the default option to get a new car but thats probably years down the line
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