Sourcing your own HP car finance...

danray

I am in the process of changing my car, have found a new vehicle, sourced finance through an FCA registered company (at an exceptional rate via my sister who works for Investec) and then have hit a stumbling block. 

The dealer Evans Halshaw (multiple franchises and a major national company) have said that it is illegal to source finance elsewhere as ‘they would be entering into a sale with 3 parties’. As a layman I can’t see the difference between me sourcing my own (cheaper) finance and them selling me forecourt finance, other than the assumption that they make a kick back on selling a financial product. 

The sceptic in me would regard this as them being sneaky and trying to prod me into something that is benefiting them rather than me. Thinking more generously it may be that the guy just doesn’t understand. 

If you could give me some/any guidance on what FCA rules apply/legislation there is that allows me to find my own finance I would be enormously appreciative. I have read the pages on the MSE website that seem to suggest that this mechanism is normal, but most of the focus seems to be on the differentiation between a personal car loan and a forecourt HP. 

TadleyBaggie

The dealer is mistaken (being generous), financing a car via a personal loan is normal and is done day in day out. Personally I would walk away from this dealer and never give them any business again.

Grumpy_chap

The dealer is incorrect, but also does not need to know where you are getting the money from.  

You have agreed a price for the car and if you don't take finance from the dealer, you are effectively a cash buyer.

Go back and say you will have the car at the agreed price and will pay cash.  No need to say any more than that, and best not to as it's none of the dealer's business.  They may push back under the guise of AML regulations - if do, just say your sister helped out (which is true).  Obviously, you won't get any finance "incentives" the dealer may have offered.

It is a shame that car dealers are no longer in the business of selling cars, but pushing finance and the car is ancillary to the arrangement.

Nearlyold

My initial comments are on the assumption it's HP you have arranged and not a personal loan - I take it that's one of the sales staff at the dealership telling you that. It's not (or certainly wasn't previously) official company policy, the "selling" procedure is no different from them arranging HP themselves as it always the HP providers that are sent the invoice and pay EH for the car. The only change for the dealership is they have to make it clear by way of a note in the file that you have arranged your own HP and that no finance advice was given (this would be an internal compliance requirement) - they may ask you to sign a document to that effect, it does of course mean you can't complain about the suitability or otherwise of the finance to EH at a later date.
If it's a personal loan you've arranged you have the same status as a cash buyer and  no special procedures are required so the salesman was talking out his Ar**.

danray

That’s really useful thanks mate. It is a HP that I have organised, thank you for confirming my suspicion that the salesman is talking absolute rubbish. 

Nearlyold

Only thing that may cause a problem is that they possibly won't release the car to you until the HP provider has paid them for it if it's not a lender they normally deal with  - not much you can do about that. 

Grumpy_chap

danray said:

That’s really useful thanks mate. It is a HP that I have organised, thank you for confirming my suspicion that the salesman is talking absolute rubbish. 

My previous response probably needs qualifying that I thought it was loan you organised, not separate HP.

MalMonroe

Of course that salesman would lose commission if you didn't take the Evans Halshaw finance. That's why he told you a load of rubbish. You don't have to take their finance if you have a better deal though, as others have said.

Added to that, you don't have to buy a car from them either. I wouldn't, and I'd make sure I told the MD why, as well. 

[Deleted User]

I agree with the others, i loathe this kind of hard-sell, they know some people don't posess all the facts so bend the truth to make sure their commissions are guaranteed to be paid, i much rather them be upfront because then i can either negotiate a better deal, or accept it and the guy can have his bonus.
Their sneaky/sly/underhand methods make me take my hard earned money to the other dealers of that car, even though they could be further away !

foxy-stoat

Nearlyold said:

Only thing that may cause a problem is that they possibly won't release the car to you until the HP provider has paid them for it if it's not a lender they normally deal with  - not much you can do about that. 

I would hope they wouldn't release the car without funds being in their bank account, be it with a lender they would use or not as nothing would be guaranteed for the deal until the cash hits their account.

Salesperson is talking rubbish though.

Nearlyold

Actually it's not unusual for dealers to release cars almost straight after the customer has come in and signed the finance paperwork and well  before payment from the finance company hits the dealers bank account. In difficult times some dealers have tried to introduce "no delivery until cleared funds" (to help with cashflow) from the lender hit the account but this  leads to problems as customers don't want to wait that long.