BMW AUC finance rates / FCA rules.
Discussion
I’m confused! I’ve been reading around on how the FCA is clamping down on unscrupulous sales transactions for used car finance.
I’m helping a girlfriend of mine looking into a used car. One dealership said it was 6.9 % on all used cars. Another said it’s 8.9 % on everything used.
What gives? What are the actual rates and rules? I note VW is a fixed 8.9 %
I think she’ll be better off with a bank loan anyway.
I’m helping a girlfriend of mine looking into a used car. One dealership said it was 6.9 % on all used cars. Another said it’s 8.9 % on everything used.
What gives? What are the actual rates and rules? I note VW is a fixed 8.9 %
I think she’ll be better off with a bank loan anyway.
The "rules" are basically that the customer must be treated fairly, provided with specific information about the finance agreement - including the APR and total amount payabale. and specifically that the dealers/lenders cannot have a mechanism in place to increase their commission by increasing the APR of the finance deal.
The "rules" do not prevent a dealer selling you a car at 49.9% APR provided the rate is clearly stated on the documentation.
They do not prevent a dealer offering you finance from company Y because they know they pay more commission than company X - even though the dealer has accounts with both providers.
There is no requirement for a standard finance rate across all stock. Many of the manufacturer finance houses do make a standard rate available to dealers, but they are generally not very competitive.
A bank loan is usually cheaper than finance on a used car.
The "rules" do not prevent a dealer selling you a car at 49.9% APR provided the rate is clearly stated on the documentation.
They do not prevent a dealer offering you finance from company Y because they know they pay more commission than company X - even though the dealer has accounts with both providers.
There is no requirement for a standard finance rate across all stock. Many of the manufacturer finance houses do make a standard rate available to dealers, but they are generally not very competitive.
A bank loan is usually cheaper than finance on a used car.
The dealers can set their APR at whatever level they want within reason as long as they are clear and transparent about it.
I purchased an AUC from BMW at the weekend, I think the rate they were promoting was 8.9%.
I have obtained a personal loan through Halifax Bank at 2.9% instead. There was no bother with the dealer over how I was paying for the car, they simply asked how Iw as paying and I said cash purchase and we moved on, They know that people can get far better rates elsewhere generally than they offer on the AUC.
I purchased an AUC from BMW at the weekend, I think the rate they were promoting was 8.9%.
I have obtained a personal loan through Halifax Bank at 2.9% instead. There was no bother with the dealer over how I was paying for the car, they simply asked how Iw as paying and I said cash purchase and we moved on, They know that people can get far better rates elsewhere generally than they offer on the AUC.
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