PCP mis-sold

Shakin_Steve

Yes, there are certainly a good few companies jumping on this particular bandwagon.

Grumpy_chap

In what way was anyone mis-sold and what loss did they suffer?

DrEskimo

I remember reading about an investigation that found that dealers were actively pushing higher APRs to consumers as it was directly linked to increased commission on their behalf.

I can quite believe there would be a strong case if that was the case. I may be mistaken though, and can no way know whether that is the case with the OP.

Grumpy_chap

Thanks @DrEskimo - what you describe is not correct and is certainly "sharp practice" but I wonder whether it is mis-selling or failure to negotiate?  

Car buying guides often say to negotiate on the price of the car and then to negotiate on the finance rate.

If a car is advertised at £25k list price and 4.9% APR:
A small number of people will just pay that. 
Many people will negotiate on the price, with varying success, so maybe pay £23.75k (5% discount) down to £20k (20% discount really good negotiator).
If the APR can be brought down to 2.5% APR as well, then that makes a further considerable difference.

I do not condone any of the way the selling of cars works like that.  It is wrong, confusing and results in people being "ripped off".  It possibly even results in a level of (indirect) discrimination, which may even cover protected characteristics - age (vulnerability) or disability (e.g. anxiety).  The whole process of the new car buying "game" - especially the part where you have to deal then walk out then wait the call - really stinks and is entirely wrong.

What I am not sure, is whether any of this process amounts to mis-selling.  How is "mis-selling" defined?

DrEskimo

Grumpy_chap said:

Thanks @DrEskimo - what you describe is not correct and is certainly "sharp practice" but I wonder whether it is mis-selling or failure to negotiate?  

Car buying guides often say to negotiate on the price of the car and then to negotiate on the finance rate.

If a car is advertised at £25k list price and 4.9% APR:
A small number of people will just pay that. 
Many people will negotiate on the price, with varying success, so maybe pay £23.75k (5% discount) down to £20k (20% discount really good negotiator).
If the APR can be brought down to 2.5% APR as well, then that makes a further considerable difference.

I do not condone any of the way the selling of cars works like that.  It is wrong, confusing and results in people being "ripped off".  It possibly even results in a level of (indirect) discrimination, which may even cover protected characteristics - age (vulnerability) or disability (e.g. anxiety).  The whole process of the new car buying "game" - especially the part where you have to deal then walk out then wait the call - really stinks and is entirely wrong.

What I am not sure, is whether any of this process amounts to mis-selling.  How is "mis-selling" defined?

To an extent I agree, but if the investigation found that dealers were misrepresenting the financial risk of buyers to lead them to believe they would only be able to achieve a certain rate that was higher than reality, then of course that would be a clear case of mis-selling.

Grumpy_chap

DrEskimo said:

To an extent I agree, but if the investigation found that dealers were misrepresenting the financial risk of buyers to lead them to believe they would only be able to achieve a certain rate that was higher than reality, then of course that would be a clear case of mis-selling.

I agree, and the way car sales are done is an outrage.  
So, there is a negotiation on the APR after the price for the car has been agreed, and the conversation following this kind of script:
D - The finance rate is 4.9%APR
C - I think I can get better than that from the bank
D - As I really want your business, I can get you 4.5% APR
C - Yeah, but my bank sent me an offer yesterday at 2% APR
D - I've spoken to the boss, and he has been able to get you a rate of 3.9%APR for an order today
C - That's too much for me, I'll go and check the bank's offer.  (Leaves dealership.)
D - (2 days later) - Great news C, I've got you a fantastic rate for the finance, 2.75% APR.  It's a really great offer but only for the car if ordered today.  It's the best I can get.
C - That's still a bit higher than I can get from the bank, but for the convenience of everything in one place, I'll pop in later today and place that order.  Just checking the price will still be honoured as per the weekend?

So, the Dealer knows he could have got 1.75% APR for the customer, and knew all along, but tried the higher rates.  Is that mis-selling?

Is it also mis-selling to advertise the car at £25k then negotiate down so one customer pays £24k, but another pays £20k?  What about the, presumably rare customer, who just pays the list price?

It is all wrong to me, but when does "negotiation" become "mis-selling"?  Genuine question.
I'd still like to see the car industry clean up their act - and I think they'd sell more cars to boot.  I have often left a car dealer with no purchase and kept the old car simply because the dealer was not interested in a deal.

MattMattMattUK

Grumpy_chap said:

DrEskimo said:

To an extent I agree, but if the investigation found that dealers were misrepresenting the financial risk of buyers to lead them to believe they would only be able to achieve a certain rate that was higher than reality, then of course that would be a clear case of mis-selling.

I agree, and the way car sales are done is an outrage.  
So, there is a negotiation on the APR after the price for the car has been agreed, and the conversation following this kind of script:
D - The finance rate is 4.9%APR
C - I think I can get better than that from the bank
D - As I really want your business, I can get you 4.5% APR
C - Yeah, but my bank sent me an offer yesterday at 2% APR
D - I've spoken to the boss, and he has been able to get you a rate of 3.9%APR for an order today
C - That's too much for me, I'll go and check the bank's offer.  (Leaves dealership.)
D - (2 days later) - Great news C, I've got you a fantastic rate for the finance, 2.75% APR.  It's a really great offer but only for the car if ordered today.  It's the best I can get.
C - That's still a bit higher than I can get from the bank, but for the convenience of everything in one place, I'll pop in later today and place that order.  Just checking the price will still be honoured as per the weekend?

So, the Dealer knows he could have got 1.75% APR for the customer, and knew all along, but tried the higher rates.  Is that mis-selling?

Is it also mis-selling to advertise the car at £25k then negotiate down so one customer pays £24k, but another pays £20k?  What about the, presumably rare customer, who just pays the list price?

It is all wrong to me, but when does "negotiation" become "mis-selling"?  Genuine question.
I'd still like to see the car industry clean up their act - and I think they'd sell more cars to boot.  I have often left a car dealer with no purchase and kept the old car simply because the dealer was not interested in a deal.

I think a lot of this so called mis selling is nothing of the sort, most of the claimed seem to involve someone who bought something without taking the time to understand what they were buying. Much like the "irresponsible lending" bandwagon I would say in most cases irresponsible borrowing is by far the bigger factor. People need to take responsibility for their actions and not try to pass the responsibility for their poor decision making onto others.

The_Fat_Controller

Me : What's the best discount for a cash purchase on that new XXXX you have in the compound ?
Dealer : £1200 (9%) . However if you take it on PCP you can have the same discount, a £500 contribution from the finance company and 0% APR over 48 months (other terms were available at the same rate)
Me : Sounds good, any catches ?
Dealer : If you want to pay off the finance, please don't do it in the first 3 months or we'll lose our commission.
Me : We have a deal !

Not all car dealers are robbing barstewards, this was at one of the largest groups in Scotland, the likes of Carwow could not beat them.

Do your research and of course if you are reading this, you already have the tools at your fingertips !

[Deleted User]

Willguilfoyle said:

redpete said:

Willguilfoyle said:

Has anybody tried to reclaim mis-sold PCP deals? I am currently starting the process and have been told I am due £10k plus in compensation for one of my previous cars? I have had other cars to which are eligible for the compensation. Almost seems to good to be true? 

So you've had several cars on PCP, presumably the experience was not so bad otherwise you wouldn't have repeated it more than once, yet you think you should be compensated for it?

redpete said:

Willguilfoyle said:

Has anybody tried to reclaim mis-sold PCP deals? I am currently starting the process and have been told I am due £10k plus in compensation for one of my previous cars? I have had other cars to which are eligible for the compensation. Almost seems to good to be true? 

So you've had several cars on PCP, presumably the experience was not so bad otherwise you wouldn't have repeated it more than once, yet you think you should be compensated for it?

Lots of people got compensation for PPI that they didn’t even know they had? 

If some organisation has mislead/ lied about commission for there own personal gain surely they should be held accountable in the only way that they care about £££ 

PPI was listed on the loan documents and on every single credit card statement, no-one didn't know they had it, it was simply one of the myriad of lies pushed by claims management firms. PPI was undoubtedly miss-sold but it wasn't because of this myth.

You weren't miss-sold PCP just because the car salesman got some commission for selling a car on finance, that is how they get a salary, it's extremely well known. Lose the commission and they will simply take away finance from the sales floor and you have to buy the car cash or get your own finance.

Shakin_Steve

Just seen an ad on tv with reference to claiming for mis-stated emissions figures if you bought a diesel car between 2017 and 2020. If you also bought it on PCP, you could get more back than you paid 😄