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Won’t sell me car as I don’t want finance

edited 30 November -1 at 1:00AM in Motoring
69 replies 4.1K views
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  • AdrianCAdrianC Forumite
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    motorguy wrote: »
    Its not a cap on the rates being proposed, its a flat rate commission irrespective of the rate thats being proposed.
    Yes, I know. I was replying to the specific bit I quoted.
  • Penelopa.PitstopPenelopa.Pitstop Forumite
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    As somebody else said they're probably worried about money laundering... unless you're absolutely loaded not many people have 20k cash for a car so maybe this particular branch isnt used to having such high cash sales.
    People are paying by cash for much more expensive cars. There's nothing strange about it. They don't bring pile of cash, just use debit card.

    I told dealer that I can consider finance deal if there's some incentive. Thinking of course, that I will pay it off straight away. He said, no incentive and didn't push for any finance deal. The same at other dealer two years later.

  • motorguymotorguy Forumite
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    People are paying by cash for much more expensive cars. There's nothing strange about it. They don't bring pile of cash, just use debit card.

    I told dealer that I can consider finance deal if there's some incentive. Thinking of course, that I will pay it off straight away. He said, no incentive and didn't push for any finance deal. The same at other dealer two years later.

    Incentives tend to run on new cars and are manufacturer based. So there might be a "contribution" from the manufacturer to use their finance scheme. That's where you'd win in terms of taking out the finance and cancelling it.

    Used cars there tends not to be - sometimes a manufacturer will do it for Approved Used stock. At the time i bought my last (year old) Passat it was £1,000 contribution and the time before that with a Golf it was two free services.

    Whilst the salesman and dealer will get commission for you taking finance, its rarely significant enough for them to extra discount the car because of it.
    Just because you're offended doesnt mean you're right
  • JumblebumbleJumblebumble Forumite
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    I think anyone who is talking about money laundering may be confusing paying cash with paying a full amount via a traceable bank transfer.
    HMRC have a registration scheme and I struggle to believe any car dealer chain would not be on it as I imagine they would be selling to fleet and leasing companies as well and I doubt they would let that business walk away.
    https://www.gov.uk/guidance/money-laundering-regulations-high-value-dealer-registration

    Much more likely as other poster have pointed out that on a rare car the dealer wants the finance commission and who can in any way blame them as if they don't they might as well go and burn a few £50 notes
  • buglawtonbuglawton Forumite
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    motorguy wrote: »
    You missed a word out.

    The issue is / was that dealers often get a higher commission for selling a product with a higher interest rate. The FCA change means that from next year it must be a flat rate.

    Theres no "scandal". Although that wont stop the ambulance chasing lawyers trying to make it one. Oh, and the tabloids - expect the Daily Mail to have pictures of someone standing beside a car with a sad face after buying finance at 3.9% rather than 2.9% and detail on how much this has impacted their lives.
    The FCA's focus is on used car finance where manufacturers don't offer fairytale interest rates. So as the MSE itself has said, punters could be paying 8-13%. Did you have an agenda for playing this issue down?
  • edited 22 October 2019 at 10:05PM
    motorguymotorguy Forumite
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    edited 22 October 2019 at 10:05PM
    buglawton wrote: »
    The FCA's focus is on used car finance where manufacturers don't offer fairytale interest rates. So as the MSE itself has said, punters could be paying 8-13%. Did you have an agenda for playing this issue down?

    Its focus this particular legislative change is on car finance, not specifically used car finance.

    https://www.fca.org.uk/publications/consultation-papers/cp19-28-motor-finance-discretionary-commission-models-and-consumer-credit-commission-disclosure

    I'm not playing the issue down, i'm bringing it back down from the heady heights of being a "scandal" which is where you pitched it. It isnt. Its a correction of behaviours, thats all.

    And interestingly, an analyst from PwC noted "'Although we expect firms to comply with the spirit of the changes, it could result in unintended consequences, including increased flat-fee commission payments, car prices and bundled product costs."

    So may not necessarily be a "win" for consumers.

    Also, an AA spokesman said "'The FCA has concluded, quite rightly, that there is no inherent problem with car finance products themselves. "

    No scandal, no com-pen-say-shun for Daily Mail readers.

    [insert sad face picture here]
    Just because you're offended doesnt mean you're right
  • AdrianCAdrianC Forumite
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    buglawton wrote: »
    Did you have an agenda for playing this issue down?
    Ah, the old "You don't agree with me, so you MUST BE ONE OF THEM!" line...
  • buglawtonbuglawton Forumite
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    motorguy wrote: »
    Its focus this particular legislative change is on car finance, not specifically used car finance.

    https://www.fca.org.uk/publications/consultation-papers/cp19-28-motor-finance-discretionary-commission-models-and-consumer-credit-commission-disclosure

    I'm not playing the issue down, i'm bringing it back down from the heady heights of being a "scandal" which is where you pitched it. It isnt. Its a correction of behaviours, thats all.

    And interestingly, an analyst from PwC noted "'Although we expect firms to comply with the spirit of the changes, it could result in unintended consequences, including increased flat-fee commission payments, car prices and bundled product costs."

    So may not necessarily be a "win" for consumers.

    Also, an AA spokesman said "'The FCA has concluded, quite rightly, that there is no inherent problem with car finance products themselves. "

    No scandal, no com-pen-say-shun for Daily Mail readers.

    [insert sad face picture here]
    I brought up a sobering report by the Money Box programme where facts were stated such as, new car finance interest rates are strongly influenced by the manufacturers and are not seen by the FCA as a problem.

    What the FCA sees as a problem is used car finance where dealer commission is earned in proportion to interest rate and amount borrowed. The higher and the bigger, the better for commission. The FCA has found reason to act and things will therefore change.

    Not sure why this sobering news has caused such an emotional reaction...
  • motorguymotorguy Forumite
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    buglawton wrote: »
    I brought up a sobering report by the Money Box programme where facts were stated such as, new car finance interest rates are strongly influenced by the manufacturers and are not seen by the FCA as a problem.

    What the FCA sees as a problem is used car finance where dealer commission is earned in proportion to interest rate and amount borrowed. The higher and the bigger, the better for commission. The FCA has found reason to act and things will therefore change.

    Not sure why this sobering news has caused such an emotional reaction...

    The use of "sobering" is not an emotional reaction then? And your use of the word "scandal" emotive? No?

    No emotional reaction on my part though - merely pointing out its NOT a scandal. Nor is PCP, nor is car salesmen and dealerships making a profit. None of those are scandals.

    There may be corrective measures along the way - and that may a good thing - but there may also be consequences to those measures, as pointed out by PWC.

    Interesting though that after what i think has been a 2 year investigation, the FCA has recommended what has amounted to a few minor tweaks, rather than the massive overhaul predicted by some.
    Just because you're offended doesnt mean you're right
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