Car dealer blabbing about FCA requirements

[ewand]

Had a couple of contrasting car buying experiences over the weekend. One was going to Polestar's test drive operation at MK, where we had a bit of a spiel about the car before going out on a follow-the-leader test drive. After getting back, had a relaxed chat about the cars (and other cars in turn) with a couple of the specialists who were hanging about - there was no hard sell, and it will be interesting to see what follow up happens.

Then we went to a traditional car main dealer to test drive a car that we pretty quickly decided to buy. Cue lots of puff about needing to go through FCA regulated questionnaires and needing to fill in various forms that were basically requesting a insurance quote, and the "FCA regulated" bit was nothing more than a sales pitch for GAP insurance, Supaguard, alloy & cosmetic damage insurance (none of which I'm going to buy).

The last car bought (~2yrs ago) from a different OEM main dealer had exactly the same st, so I presume it's industry standard to try to flummox people into thinking that somehow they need to be offered all of this stuff as if it's the FCA regulating that they must be advised about GAP insurance etc...

Really grinds my gears this. The Polestar model left me feeling like they're in the future, the other dealers behaviour felt like Arthur Daley.

[boombang]

Recent experience was 1% buy it or fk off so someone else can and 99% disclosure docs with the 'Business Manager' with a goal of selling overpriced GAP at £1k for 3 years (as pointed out on here recently NFU give it for 2 years and I know LV give 1 year).

I've skimmed it and put it to one side, they agreed to chuck in the paint coating / insurance as an incentive to buy, but if we do go ahead with order the rest won't even get considered.

[anonymous-user]

It's about miselling and disclosure. In particular two issues they are trying to head off:

1. "I didn't need your badly applied AutoGlym, which you charged me £800 for." Which is solved by the statement of needs.

And

2. "What the fk is a shortfall? What do you mean I owe the finance company 10k for the white A3 I've just reversed into the front of Nando's, insurance pays innit."

Manufacturers probably now wish they had made people sign a "MPG and emissions statements are for entertainment purposes only" form as well.

Though there is an element of scaring you into signing for the Gap etc.

[ewand]

There was even an elaborate trick of me getting a text with a 6-digit PIN in it, which matey boy has to enter into a screen to prove that we had "the disclosure".

[Chris32345]

ewand said:

There was even an elaborate trick of me getting a text with a 6-digit PIN in it, which matey boy has to enter into a screen to prove that we had "the disclosure".

Where is the trick in that?

[georgeyboy12345]

Chris32345 said:

Where is the trick in that?

They can (and do) sell your contact number on to telemarketers and other scammy types. I had this happen at a dealer a few months ago when I was buying, lo and behold the next day I was getting cold called twice a day for the next two weeks

Similar experience recently, the first car I was looking at, the guy was super chilled and none of these FCA terms and conditions nonsense. He just threw me the keys and left me alone, then when I asked for a test drive, no problem. Then the next garage I was pummelled with all these terms and conditions and they needed my all my contact details, etc, even though I wasn’t using finance. Put me right off and I ended up buying from the first place instead.

[BenB91]

ewand said:

There was even an elaborate trick of me getting a text with a 6-digit PIN in it, which matey boy has to enter into a screen to prove that we had "the disclosure".

How is that a trick?

Either accept the process or don't buy the car. Simples.

[ewand]

BenB91 said:

ewand said:

There was even an elaborate trick of me getting a text with a 6-digit PIN in it, which matey boy has to enter into a screen to prove that we had "the disclosure".

How is that a trick?

Either accept the process or don't buy the car. Simples.

The trick was that it was a process being used to validate the whole exercise; they have my phone number anyway, but this whole "we need to text you a PIN for the FCA validation" is bks. I'm sure if I said "I'm not doing any of this, here's my money, give me the car" then it would still go ahead but it's almost easier to humour the sales people in the dealership and then decline everything they offer, in the hope they just get on with it.

[Nickbrapp]

I know exactly what you mean

Booked a test drive at a seat dealer at the weekend, turned up, not greeted. Waited around 30 mins and then the man came out huffing and puffing and gave us the speel about it being busy on the weekend and appointments running over, he could have just come to say I’m really sorry this appointment has run over, could I get you a drink and open any cars you like?

But no, then when actually got to talk to him he moaned about leasing etc

Gave up in the end and went to the ŠKODA dealer next door, same franchise and the experience couldn’t have been better, offered to look at any car, very helpful and all over a pleasant experience.

[ewand]

Update: having received the "compliance report" from the dealer (which is a dressed up proposal to sell all the addon guff they try to push), I followed the trail a bit and found that "Automotive Compliance Ltd" is providing a service to them (and doubtless, lots of other dealers):

https://automotive-compliance.co.uk/Home/Complianc...

If you accept that people do want to buy GAP insurance, alloy wheel insurance etc, then those are regulated products that are ultimately governed by rules put in place and overseen by the Financial Conduct Authority. But if the buyer - ie me - doesn't need or want any of these addons, then there's no need for "compliance" in any shape, unless the dealership was expected to show some kind of diligence around money laundering for a cash sale.

It looks like Automotive Compliance Ltd are offering services to dealers that take care of the FCA regulated bit (so the dealers don't need to be directly regulated themselves) but looking at their own website, it feels like they're trying to scare unsuspecting motor traders into using their service in case the bogeyman of the FCA comes along and shuts you down.

[Andy665]

In very simplistic terms any insurance / financial products that a customer could buy from a dealership have to be offered, not doing so falls foul of the FCA regulations.

Not offering a product that may have benefitted the customer could see a comeback on the dealer. E.g Dealer can provide paint protection but cannot prove they have offered it to a customer. Customer subsequently finds their car has suffered from bird lime etching. As dealer has not offered available paint protection (or prove it was offered but declined) then customer, through the FCZ could see the dealer being liable for sorting out the bird lime etching problem

Many different ways of doing this and using a 3rd Companiys services to track all activity is used by many dealers/ groups

[HTP99]

Actually OP you had 1 car buying experience, you didn't by the Polestar so you didn't get to the FCA stage, if Polestar do offer GAP, Smart Cover, etc these products would have been presented to you in some way, once you had decided to buy the car and you would have been asked to confirm whether you wanted the products or not.

Admittedly some dealers do push it aggressively because it is a good profit stream, there is no need for you to take offence, just politely decline.

[Andrew[MG]]

Andy665 said:

In very simplistic terms any insurance / financial products that a customer could buy from a dealership have to be offered, not doing so falls foul of the FCA regulations.

Not offering a product that may have benefitted the customer could see a comeback on the dealer. E.g Dealer can provide paint protection but cannot prove they have offered it to a customer. Customer subsequently finds their car has suffered from bird lime etching. As dealer has not offered available paint protection (or prove it was offered but declined) then customer, through the FCZ could see the dealer being liable for sorting out the bird lime etching problem

Many different ways of doing this and using a 3rd Companiys services to track all activity is used by many dealers/ groups

100%

If you have permission to sell insurance products then you must offer it to every customer otherwise you can get penalised by the FCA or held liable if a customer crashes a car, doesn't have GAP and you CAN sell them it but didn't offer.

It doesn't sit well with all customers but it's the way the rules have been formed.

[Sheepshanks]

The GAP one, especially, is kond of understandable (in case you write the car off and say you were never offered it) but I thought the FCA had been asked about these things and if the customer says "no" then it should be left there.

It's nothing new - I reached a stand-off with the old Mercedes Direct where I refused the sign the StarShield (paint protection etc) paperwork as I hadn't asked for it. They'd given it at no extra cost, but itemised it out the the total price. What I was hoping was they'd take it off the invoice so saving me another £299. They won. Left a bad taste is what was otherwise a very good experience.

[Andy665]

Sheepshanks said:

The GAP one, especially, is kond of understandable (in case you write the car off and say you were never offered it) but I thought the FCA had been asked about these things and if the customer says "no" then it should be left there.

It's nothing new - I reached a stand-off with the old Mercedes Direct where I refused the sign the StarShield (paint protection etc) paperwork as I hadn't asked for it. They'd given it at no extra cost, but itemised it out the the total price. What I was hoping was they'd take it off the invoice so saving me another £299. They won. Left a bad taste is what was otherwise a very good experience.

That will be more about hitting dealership targets than charging you £299 more than you needed to pay

[blue_haddock]

boombang said:

Recent experience was 1% buy it or fk off so someone else can and 99% disclosure docs with the 'Business Manager' with a goal of selling overpriced GAP at £1k for 3 years (as pointed out on here recently NFU give it for 2 years and I know LV give 1 year).

I've skimmed it and put it to one side, they agreed to chuck in the paint coating / insurance as an incentive to buy, but if we do go ahead with order the rest won't even get considered.

boooooooobies!

[ralphrj]

Andy665 said:

Sheepshanks said:

The GAP one, especially, is kond of understandable (in case you write the car off and say you were never offered it) but I thought the FCA had been asked about these things and if the customer says "no" then it should be left there.

It's nothing new - I reached a stand-off with the old Mercedes Direct where I refused the sign the StarShield (paint protection etc) paperwork as I hadn't asked for it. They'd given it at no extra cost, but itemised it out the the total price. What I was hoping was they'd take it off the invoice so saving me another £299. They won. Left a bad taste is what was otherwise a very good experience.

That will be more about hitting dealership targets than charging you £299 more than you needed to pay

Salesperson would have been paid circa £150 commission for the car sale and £50 commission for the starshield so the switch from an agreed price of, say, £20,000 for the car to £19,701 + £299 was an attempt to inflate their earnings.

[ewand]

Andy665 said:

In very simplistic terms any insurance / financial products that a customer could buy from a dealership have to be offered, not doing so falls foul of the FCA regulations.

Not offering a product that may have benefitted the customer could see a comeback on the dealer. E.g Dealer can provide paint protection but cannot prove they have offered it to a customer. Customer subsequently finds their car has suffered from bird lime etching. As dealer has not offered available paint protection (or prove it was offered but declined) then customer, through the FCZ could see the dealer being liable for sorting out the bird lime etching problem

Many different ways of doing this and using a 3rd Companiys services to track all activity is used by many dealers/ groups

Really? I can understand that if they do the sales pitch for it, then they want to document that fact. What difference would it make to my consumer rights if the dealer offered an addon which I declined (like paint protection)? The FCA has many more things on their mind than pursuing a dealer to sort out a paint defect just because they didn't offer me additional insurance.

By this argument, buying a telly in Dixons would force them to offer me an extended warranty and get a load of FCA paperwork filled in to say that I didn't want it, and if they didn't and it went pop the day the factory warranty was out, then Dixons would be liable...

[ewand]

Out of interest and a sense of bloody-mindedness, I contacted the FCA to clarify if there are any rules that say car dealers are somehow compelled to offer insurance services like GAP, damage etc etc. Here's what they came back with:

FCA - Supervision Retail and Authorisations dept said:

Our rules

I’ve completed searches of the Insurance Conduct of Business Sourcebook (ICOBS), which forms part of the FCA Handbook and I’ve been unable to locate any specific rules or regulations which would require a motor dealership to offer insurance products to all customers. This will be a commercial decision which a firm has made themselves.

[123DWA]

ewand said:

Out of interest and a sense of bloody-mindedness, I contacted the FCA to clarify if there are any rules that say car dealers are somehow compelled to offer insurance services like GAP, damage etc etc. Here's what they came back with:

FCA - Supervision Retail and Authorisations dept said:

Our rules

I’ve completed searches of the Insurance Conduct of Business Sourcebook (ICOBS), which forms part of the FCA Handbook and I’ve been unable to locate any specific rules or regulations which would require a motor dealership to offer insurance products to all customers. This will be a commercial decision which a firm has made themselves.

I think you may have misunderstood, Car dealers most certainly do not HAVE to offer insurance products however if they do then they must be able to demonstrate that every customer has had the features & benefits of it explained to them and the option to accept/decline.