VWFS Mis Selling Claim

DrEskimo

Brock_and_Roll said:

So the buyer has all the upside (if the Alfa turns out to be a classic) their their potential downside is fixed.

Being 'fixed' is not in itself an advantage. It depends how it is fixed. If the GFV was set at £100 we all agree this doesn't do much to protect against depreciation, so the question becomes where does it? The actual value of the GFV needs to be considered and more often than not, this is set to a level that is below what they predict trade value will be. More so given the recent changes to how VAT is charged to dealers.

"The revised treatment does not apply if the final payments are set at a level which is demonstrably below market value, so revised payment profiles could preserve the status quo."

The other part of course is the cost. Unless 0%, getting this 'fixed cost' is not free. It costs the buyer money to get this 'asset insurance' through interest, otherwise they cannot benefit from it. The next question is how much more this costs add relative to other finance methods, or indeed no finance at all. Therefore the downside is that if the car is worth more than the GFV, the buyer has unnecessarily paid thousands in interest for a form of 'asset value insurance' product that was worthless.

The final part is that when viewed as an 'insurance product' it not only is usually very expensive (typically adding ~£1,000 per year in interest), but it terms are incredibly punitive and comes with additional charges (mileage and damages). I imagine if it was offered as a stand alone product for cash buyers, the uptake would be the sum total of zero....

Overall, the cost, terms and probability of PCP resulting in an outcome that favours the buyer need to be considered. IMHO, it very rarely does.

MrsM2016

Thank you for all the replies, particularly those of you who actually have knowledge of the matter and want to contribute more than just insulting my "supposed" intelligence.

The balloon payment figure is £16000. The car, before covid and despite being 5000 miles below the agreed mileage, was valued at £13000 4 months ago. With covid, and the fact they sell the cars handed back via auction, I imagine they will sell it for between £10-£11k. (One of the reasons I thought they would want to work with me to resolve this!)

In theory what has been said about the monthly payment costs is correct, IF I hadn't been put on a higher rate of interest to maximise the commission payment. I have paid circa £11000 in interest over the past 4 years. One of the grounds for PCP misselling is the myth that you only pay for the depreciation of the vehicle. You dont, you also pay interest on the whole amount as well as the depreciation.

My data protection request has revealed that there were better interest rates available from that lender that weren't mentioned to me, despite me asking and my credit score being 983 out of 999 with Experian. THIS IS MISSELLING. And the Plevin precedent is valid because they can not recommend a financial product to you which is worse for you to increase their commission payment so I will be proceeding with my complaint on this basis.

My advice to anyone reading this thread because of similar circumstances to me is to do your own research, (I cant post links as I am new), but there is lots of information online that a simple "PCP mis selling" Google search will reveal. Car dealers have a responsibility to sell finance responsibly and that includes not lying to you in the selling process, not pushing PCP heavily without exploring whether HP or a car loan etc would be a better option for you, not putting time pressure on you and being transparent throughout. And if you believe that is what happened, complain. 

chanz4

When they drive it to the workshop it adds miles, you dont really have a case with that

[Deleted User]

MrsM2016 said:

My data protection request has revealed that there were better interest rates available from that lender that weren't mentioned to me, despite me asking and my credit score being 983 out of 999 with Experian. THIS IS MISSELLING. 

Your interest rate was not, and never has been, dictated by a number provided to you by Experian.  

Your risk levels were either too high for the lower rates or you didn't meet their internal criteria.  That is IN NO WAY MIS SELLING.

chanz4

MrsM2016 said:

Thank you for all the replies, particularly those of you who actually have knowledge of the matter and want to contribute more than just insulting my "supposed" intelligence.

The balloon payment figure is £16000. The car, before covid and despite being 5000 miles below the agreed mileage, was valued at £13000 4 months ago. With covid, and the fact they sell the cars handed back via auction, I imagine they will sell it for between £10-£11k. (One of the reasons I thought they would want to work with me to resolve this!)

In theory what has been said about the monthly payment costs is correct, IF I hadn't been put on a higher rate of interest to maximise the commission payment. I have paid circa £11000 in interest over the past 4 years. One of the grounds for PCP misselling is the myth that you only pay for the depreciation of the vehicle. You dont, you also pay interest on the whole amount as well as the depreciation.

My data protection request has revealed that there were better interest rates available from that lender that weren't mentioned to me, despite me asking and my credit score being 983 out of 999 with Experian. THIS IS MISSELLING. And the Plevin precedent is valid because they can not recommend a financial product to you which is worse for you to increase their commission payment so I will be proceeding with my complaint on this basis.

My advice to anyone reading this thread because of similar circumstances to me is to do your own research, (I cant post links as I am new), but there is lots of information online that a simple "PCP mis selling" Google search will reveal. Car dealers have a responsibility to sell finance responsibly and that includes not lying to you in the selling process, not pushing PCP heavily without exploring whether HP or a car loan etc would be a better option for you, not putting time pressure on you and being transparent throughout. And if you believe that is what happened, complain. 

Your credit score means nothing, its a lenders choice what they offer you. You signed the contract before taking the car and it would of said the rate on it. You also had a cooling off period, your complaint wont get upheld

chanz4

Experian dont lend money

MrsM2016

The FCA brought in rules in April 2014 (CONC 2.5 Conduct of business : credit broking) and these are the key points then and since:

CONC 2.5.3(3) Adequate time to read and consider the terms – suggesting that the customer was “rail-roaded” into signing the agreement 

CONC 2.5.8(13) Giving preference to a funder – suggesting that better rates were available, but the broker chose the most lucrative for themselves.

CONC 3.3 Clear fair and not mis-leading - suggesting that the communications didn’t explain everything to the customer.

CONC 4.5.3 Disclosure of commission – primarily inferring that the broker is obliged to inform the borrower of the amount of the commission.

jonesMUFCforever

This will go on and on and on - I wish her well !

Clive_Woody

MrsM2016 said:

In theory what has been said about the monthly payment costs is correct, IF I hadn't been put on a higher rate of interest to maximise the commission payment. I have paid circa £11000 in interest over the past 4 years. One of the grounds for PCP misselling is the myth that you only pay for the depreciation of the vehicle. You dont, you also pay interest on the whole amount as well as the depreciation.

My data protection request has revealed that there were better interest rates available from that lender that weren't mentioned to me, despite me asking and my credit score being 983 out of 999 with Experian. THIS IS MISSELLING. And the Plevin precedent is valid because they can not recommend a financial product to you which is worse for you to increase their commission payment so I will be proceeding with my complaint on this basis.

Not sure I am misunderstanding what you are trying to allege, but it's not the duty of the car salesman to shop around to find you the cheapest finance deal, that's your job (and should be done before the contract is signed, not at the end of the contract). Additionally, just because the lender was offering loans at a lower rate, this doesn't mean that you would have qualified for this rate. 

DrEskimo

MrsM2016 said:

The car, before covid and despite being 5000 miles below the agreed mileage, was valued at £13000 4 months ago.

Who said it was? The one dealer that you don't trust? Did you get quotes from other dealers/garages/online sellers? What about it's value on the private market? Could you buy and sell it that way for more?

MrsM2016 said:

One of the grounds for PCP misselling is the myth that you only pay for the depreciation of the vehicle. You dont, you also pay interest on the whole amount as well as the depreciation.

It's not a 'myth', it's a misconception. The VW dealer would have never suggested you didn't pay interest on the balloon payment, and it's made clear on the contract that you are borrowing the entire amount for the car.

PCP is just a loan. No more. No less. You are borrowing whatever the car costs from a finance company to buy the car at whatever price you agreed. What sets PCP apart from HP is just the repayment structure.