car finance reclaim

lis10975hay

My finance was with PSA Finance, they have now been taken over by Stellantis. Do I lodge my complaint with them? 

zantos

Does the Car Finance Reclaim in anyway affect loans that were taken out via the car companies own finance, I had loans via Toyota Finance and Hyundai Finance and wondered if these were affected and any potential refunds available..

DullGreyGuy

lis10975hay said:

My finance was with PSA Finance, they have now been taken over by Stellantis. Do I lodge my complaint with them? 

If you have grounds for a complaint you do

zantos said:

Does the Car Finance Reclaim in anyway affect loans that were taken out via the car companies own finance, I had loans via Toyota Finance and Hyundai Finance and wondered if these were affected and any potential refunds available..

Depends what grounds you are attempting to "reclaim"?

If you are talking about the conflict of interest that some sales people were offered higher commission if they got you to accept a loan at a higher APR than the lender was willing to offer then potentially. All thats known at this point is that the FCA are investigating what size the problem was. We may find that large numbers of lenders were offering this and sales people widespread used it or we may find it was a tiny percentage of lenders and most sales people would rather get the sale by offering 5.9% than risk not getting the sale by offering you 9.9% even if it doubled their commission. 

MollyR

I've just worked through Martin's page on car finance reclaim and sent my e-mail off - I bought the car from a Hyundai dealership, and the finance they arranged was with Hyundai Capital UK Ltd (which got referred to as Hyundai Finance), which is a totally different company to the dealership.  In the Initial Disclosure Document, the dealership said "We do not charge fees for our Consumer Credit services. We may receive a payment(s) or other benefits from finance providers should you decide to enter into an agreement with them" so I certainly felt it worth entering a claim.

DullGreyGuy

MollyR said:

I've just worked through Martin's page on car finance reclaim and sent my e-mail off - I bought the car from a Hyundai dealership, and the finance they arranged was with Hyundai Capital UK Ltd (which got referred to as Hyundai Finance), which is a totally different company to the dealership.  In the Initial Disclosure Document, the dealership said "We do not charge fees for our Consumer Credit services. We may receive a payment(s) or other benefits from finance providers should you decide to enter into an agreement with them" so I certainly felt it worth entering a claim.

Was it a new car or secondhand? By all accounts the FCA believe its likely to only be an issue on secondhand cars as commission on new cars are next to none as instead you get a Finance desposit contribution etc (ie Finance helps sell the car rather than increase commission on the car)

Nearlyold

DullGreyGuy said:

lis10975hay said:

My finance was with PSA Finance, they have now been taken over by Stellantis. Do I lodge my complaint with them? 

If you have grounds for a complaint you do

zantos said:

Does the Car Finance Reclaim in anyway affect loans that were taken out via the car companies own finance, I had loans via Toyota Finance and Hyundai Finance and wondered if these were affected and any potential refunds available..

Depends what grounds you are attempting to "reclaim"?

If you are talking about the conflict of interest that some sales people were offered higher commission if they got you to accept a loan at a higher APR than the lender was willing to offer then potentially. All thats known at this point is that the FCA are investigating what size the problem was. We may find that large numbers of lenders were offering this and sales people widespread used it or we may find it was a tiny percentage of lenders and most sales people would rather get the sale by offering 5.9% than risk not getting the sale by offering you 9.9% even if it doubled their commission. 

Prior to the change in rules in 2021 I worked in F&I Compliance for a dealer group. Finance companies were very keen to get our business and would offer us a competitive "base interest rate"  in order  to encourage us to use them for used car sales. (New cars are nearly always advertised along with a finance offer fixed at a particular rate by the manufacturer).

On used car deals  we were able to set a discretionary margin within agreed parameters over the base rate which would of course be reflected in the APR and commission. This practice was considered normal and had been around since God were a lad, it was thought of as just part of the deal negotiations. Before working in the motor trade I'd bought cars and said no to the initial APR offer by simply saying "No I'm not paying that" and they'd come back with a lower offer going from say 15% APR to 9.9% APR (This was when the Base Rate was much higher than it is today and 9.9% was a bloody good rate)

As an aside Business Managers were also able to offer more or less the base rate to customers if there was a business need to do so for a particular customer - so called "Deal Saver" Rates were strictly monitored by  management for over use as BMs were only meant to use it when absolutely necessary (BMs were expected  to be able to "sell" the higher rates).

Sometimes the higher rate was used in order to make  the sale worthwhile for the dealer where other factors within the deal would have otherwise meant the sale would not have been viable for the dealer.

MollyR

DullGreyGuy said:

MollyR said:

I've just worked through Martin's page on car finance reclaim and sent my e-mail off - I bought the car from a Hyundai dealership, and the finance they arranged was with Hyundai Capital UK Ltd (which got referred to as Hyundai Finance), which is a totally different company to the dealership.  In the Initial Disclosure Document, the dealership said "We do not charge fees for our Consumer Credit services. We may receive a payment(s) or other benefits from finance providers should you decide to enter into an agreement with them" so I certainly felt it worth entering a claim.

Was it a new car or secondhand? By all accounts the FCA believe its likely to only be an issue on secondhand cars as commission on new cars are next to none as instead you get a Finance desposit contribution etc (ie Finance helps sell the car rather than increase commission on the car)

I've just taken another look at Martin's page on this ( https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/ ) and as far as I can see there is no mention of it only applying to used cars.  Can you let me know where you found anything saying that new car sales are ineligible for a claim, please?

[Post edited because the forum software had automatically included the closing bracket in the URL.]

DullGreyGuy

MollyR said:

DullGreyGuy said:

MollyR said:

I've just worked through Martin's page on car finance reclaim and sent my e-mail off - I bought the car from a Hyundai dealership, and the finance they arranged was with Hyundai Capital UK Ltd (which got referred to as Hyundai Finance), which is a totally different company to the dealership.  In the Initial Disclosure Document, the dealership said "We do not charge fees for our Consumer Credit services. We may receive a payment(s) or other benefits from finance providers should you decide to enter into an agreement with them" so I certainly felt it worth entering a claim.

Was it a new car or secondhand? By all accounts the FCA believe its likely to only be an issue on secondhand cars as commission on new cars are next to none as instead you get a Finance desposit contribution etc (ie Finance helps sell the car rather than increase commission on the car)

I've just taken another look at Martin's page on this (https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/) and as far as I can see there is no mention of it only applying to used cars.  Can you let me know where you found anything saying that new car sales are ineligible for a claim, please?

Its not that they are ineligible its just highly unlikely that the conflict of interests existed for new car sales (unless you failed to get the primary finance and had to go to the second tier)

Nearlyold

MollyR said:

DullGreyGuy said:

MollyR said:

I've just worked through Martin's page on car finance reclaim and sent my e-mail off - I bought the car from a Hyundai dealership, and the finance they arranged was with Hyundai Capital UK Ltd (which got referred to as Hyundai Finance), which is a totally different company to the dealership.  In the Initial Disclosure Document, the dealership said "We do not charge fees for our Consumer Credit services. We may receive a payment(s) or other benefits from finance providers should you decide to enter into an agreement with them" so I certainly felt it worth entering a claim.

Was it a new car or secondhand? By all accounts the FCA believe its likely to only be an issue on secondhand cars as commission on new cars are next to none as instead you get a Finance desposit contribution etc (ie Finance helps sell the car rather than increase commission on the car)

I've just taken another look at Martin's page on this (https://www.moneysavingexpert.com/reclaim/reclaim-car-finance/) and as far as I can see there is no mention of it only applying to used cars.  Can you let me know where you found anything saying that new car sales are ineligible for a claim, please?

They are not ineligible, its just that most new cars are advertised alongside some sort of relatively low rate manufacturer's offer or other incentive such as deposit contribution. If you got the rate that was in the advert (as most would) then what would you be your complaint? In the unlikely event the dealer tried to bump the rate you'd have known.

MollyR

Well, no doubt you are perfectly right, but I am not going to withdraw my e-mail now;  it still seems logical to me, now that I am aware that it has been happening, that an independent dealership might well receive a bribe to encourage purchasers to take out finance, whether with the manufacturer's associated finance company or another one;  and that whichever finance company they selected might reward them for doing so, without the purchaser being informed.  Certainly, the car which we ordered had not been advertised along with any kind of finance offer anywhere that we noticed, including inside the dealership.  Maybe you will say that I should have looked around for advertisements which were not obvious!  But when buying something expensive, we never pay any attention to advertisements;  what we do pay attention to is independent reviews, and we draw up our shortlist based on those.  Since Martin didn't see fit to discourage buyers of new cars from using his form, I shall just wait until September to see what happens.

Nearlyold

The magazines you would typically look at to read reviews eg What Car, Auto Express etc were and still are full of manufacturer's finance offer adverts. Just to clarify what the issue is - it's NOT that the dealer might earn a commision from arranging finance, that is allowed, it's where the dealer was able to adjust the interest rate themselves to earn a higher commision when the lender would have accepted the customer at a lower rate.