1,000,000 car finance complaints submitted since MSE’s tool launched on 6 February 2024

Nasqueron

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

What happened to people taking personal responsibility for their decisions? Every person who took out one of these loans was told exactly what they would be paying and what the rate of interest would be. If they didn't like it, why didn't they walk away and look elsewhere for another car or another personal loan or both?

It is hardly a novel concept for a car dealer to try to get the maximum amount of cash from a buyer, whether that be in cash, commission, loan rate, extended warranty, service plans, GAP insurance, wheels and tyre cover, paint protection, fabric protection, chip and dent protection and the rest. It is common knowledge among the British public, which is why haggling over a car purchase is almost a national sport.

This wasn't mis-selling, it was mis-buying.

Actually with this one, DCA was miss-selling in that the person could be misled that they only qualified for a certain, more expensive, rate when they should have got better rates - plenty couldn't get better rates or were desperate. 

People who are 'desperate' for a loan are usually a higher lending risk and therefore pay more.  Those are the rules of lending and borrowing and always will be. If they 'couldn't get better rates', what does that tell you about their risk profile as a borrower? 

I suspect most of those who chose this sort of financing were not particularly desperate and didn't really care what the bottom line was (even though the figures were there in black and white for them to see).  If they believed they could meet the monthly payment, they went away happy.  

You're still missing the point - higher risk sure but the DCA setup was still giving them an even higher rate than they qualified for, even those with good finance history.

The DCA setup, in certain cases, worked like this:

Dealer runs finance check
Lender says customer can have X% with commission to dealer based on that rate but where they got more commission with X+1/X+2 etc
Dealer offers customer X+3% so customer is paying more than they should do so dealer gets more commission

Not sure how you can't see that is blatant mis-selling - who would question the figures given people had no idea that DCA was even a thing? Commission for a sale, sure, but the idea that your finance was artificially altered to give more money to the dealer is alien to most. Would many people risk a second credit check for a bank or alternative without knowing the rate they were offered could have been lower if the salesman wasn't greedy? If you need a car for your day to day life and you got offered an affordable rate, why would you even think the dealer was giving you a higher rate?

Last car I got was on 0% and had no add-ons either, but I wasn't a credit risk and had the cash to buy if I needed, doesn't mean everyone is in that position 

BikingBud

Nasqueron said:

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

What happened to people taking personal responsibility for their decisions? Every person who took out one of these loans was told exactly what they would be paying and what the rate of interest would be. If they didn't like it, why didn't they walk away and look elsewhere for another car or another personal loan or both?

It is hardly a novel concept for a car dealer to try to get the maximum amount of cash from a buyer, whether that be in cash, commission, loan rate, extended warranty, service plans, GAP insurance, wheels and tyre cover, paint protection, fabric protection, chip and dent protection and the rest. It is common knowledge among the British public, which is why haggling over a car purchase is almost a national sport.

This wasn't mis-selling, it was mis-buying.

Actually with this one, DCA was miss-selling in that the person could be misled that they only qualified for a certain, more expensive, rate when they should have got better rates - plenty couldn't get better rates or were desperate. 

People who are 'desperate' for a loan are usually a higher lending risk and therefore pay more.  Those are the rules of lending and borrowing and always will be. If they 'couldn't get better rates', what does that tell you about their risk profile as a borrower? 

I suspect most of those who chose this sort of financing were not particularly desperate and didn't really care what the bottom line was (even though the figures were there in black and white for them to see).  If they believed they could meet the monthly payment, they went away happy.  

You're still missing the point - higher risk sure but the DCA setup was still giving them an even higher rate than they qualified for, even those with good finance history.

The DCA setup, in certain cases, worked like this:

Dealer runs finance check
Lender says customer can have X% with commission to dealer based on that rate but where they got more commission with X+1/X+2 etc
Dealer offers customer X+3% so customer is paying more than they should do so dealer gets more commission

Not sure how you can't see that is blatant mis-selling - who would question the figures given people had no idea that DCA was even a thing? Would many people risk a second credit check for a bank or something 

For many I would suggest they weren't aware of reasonable commercial rates and what could be better for them and they likely wouldn't understand that trying other options may give them a better solution or might actually harm their credit rating. It can be seen on here many people asking if they can claim but with no understanding of the issue and where or if they may have been mis-sold. Even when advised many times to wait until the FCA have decided the posts keep coming, and complaining.

We are over protective in some areas and this comes from not educating our kids effectively, mobile phone contracts is another area where anyone with any financial nous would realise that paying beyond the contract end date was gifting money to the service provider yet so many seemed surprised and oblivious, it was just cash going out!

Considering total amount payable, not just monthly outgoing, tells you how much you are paying over the list price for the convenience and apparent kudos for that service, (nice shiny new car/phone/kitchen) only by considering this cost against other benchmarks can you determine if you can afford it and if it is value for money.

Ammah45

Hi all.
Instead of opening a new thread, I will post mine here!

I am one of those who bought a new car in 2019 with a 7.6% interest. I did send in a complaint to MB Financial services a couple of months ago and they have just replied with the following:

Thank you for your email asking for confirmation of whether we paid the dealer a discretionary commission for your introduction to us.

After checking our records, we can tell you that we did pay a scaled discretionary commission to the dealer. We'll treat your email as your complaint, unless otherwise advised by you. We normally have eight weeks to send you a final response letter, but the pause introduced by the Financial Conduct Authority (FCA) means the period starting on 11 January 2024 and ending on (and including) 25 September 2024 is not counted when calculating this eight week period.

The FCA has also published guidance about what these changes mean for customers. This guidance is available here.

Further information about the FCA’s Policy Statement can be found here.

We'll be in touch with you after 25 September 2024.

Please let us know if there’s anything else we can help with in relation to the above. September seems a long time to wait to find out if they pay anything. I am guessing they won't pay anything for the reasons already mentioned in this thread. But should I do anything else or just sit and wait?

Laura_Norder

Nasqueron said:

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

What happened to people taking personal responsibility for their decisions? Every person who took out one of these loans was told exactly what they would be paying and what the rate of interest would be. If they didn't like it, why didn't they walk away and look elsewhere for another car or another personal loan or both?

It is hardly a novel concept for a car dealer to try to get the maximum amount of cash from a buyer, whether that be in cash, commission, loan rate, extended warranty, service plans, GAP insurance, wheels and tyre cover, paint protection, fabric protection, chip and dent protection and the rest. It is common knowledge among the British public, which is why haggling over a car purchase is almost a national sport.

This wasn't mis-selling, it was mis-buying.

Actually with this one, DCA was miss-selling in that the person could be misled that they only qualified for a certain, more expensive, rate when they should have got better rates - plenty couldn't get better rates or were desperate. 

People who are 'desperate' for a loan are usually a higher lending risk and therefore pay more.  Those are the rules of lending and borrowing and always will be. If they 'couldn't get better rates', what does that tell you about their risk profile as a borrower? 

I suspect most of those who chose this sort of financing were not particularly desperate and didn't really care what the bottom line was (even though the figures were there in black and white for them to see).  If they believed they could meet the monthly payment, they went away happy.  

You're still missing the point - higher risk sure but the DCA setup was still giving them an even higher rate than they qualified for, even those with good finance history.

The DCA setup, in certain cases, worked like this:

Dealer runs finance check
Lender says customer can have X% with commission to dealer based on that rate but where they got more commission with X+1/X+2 etc
Dealer offers customer X+3% so customer is paying more than they should do so dealer gets more commission

Not sure how you can't see that is blatant mis-selling - who would question the figures given people had no idea that DCA was even a thing? Commission for a sale, sure, but the idea that your finance was artificially altered to give more money to the dealer is alien to most. Would many people risk a second credit check for a bank or alternative without knowing the rate they were offered could have been lower if the salesman wasn't greedy? If you need a car for your day to day life and you got offered an affordable rate, why would you even think the dealer was giving you a higher rate?

Last car I got was on 0% and had no add-ons either, but I wasn't a credit risk and had the cash to buy if I needed, doesn't mean everyone is in that position 

I don't believe I am missing the point.  The point is that the customer was offered an APR.  How that APR was arrived at is immaterial (or ought to have been), provided the customer was given the option to take it or leave it, which clearly they were.  

I consider myself to be a pretty savvy consumer and I would not be at all surprised to learn that a dealership were being incentivised to sell me a higher APR on car finance. 

 If I were making a major purchase like a car and I needed to borrow in order to do so, the number of credit checks I was registering would be a secondary consideration to the loan rate I was able to secure, especially if it was going to save me hundreds of pounds in the long run. 

The truth is, most customers neither knew nor cared how the APR figure was arrived at.  Of course they are now going to jump at the prospect of some free cash for filling out a few lines on a form.  Who wouldn't?  I'm all for protecting the consumer, but that should not extend to rewarding laziness, gullibility or indifference.

CoffeeLady999

I used the MSE online tool to submit for my car finance. My question is what do I do if I don't hear back within the 28 days? I know companies are swamped with enquiries, just don't want to miss doing something.

Nasqueron

CoffeeLady999 said:

I used the MSE online tool to submit for my car finance. My question is what do I do if I don't hear back within the 28 days? I know companies are swamped with enquiries, just don't want to miss doing something.

Nothing, they won't process your complaint until after the FCA look at the issue

DullGreyGuy

Ammah45 said:

Hi all.
Instead of opening a new thread, I will post mine here!

I am one of those who bought a new car in 2019 with a 7.6% interest. I did send in a complaint to MB Financial services a couple of months ago and they have just replied with the following:

Thank you for your email asking for confirmation of whether we paid the dealer a discretionary commission for your introduction to us.

After checking our records, we can tell you that we did pay a scaled discretionary commission to the dealer. We'll treat your email as your complaint, unless otherwise advised by you. We normally have eight weeks to send you a final response letter, but the pause introduced by the Financial Conduct Authority (FCA) means the period starting on 11 January 2024 and ending on (and including) 25 September 2024 is not counted when calculating this eight week period.

The FCA has also published guidance about what these changes mean for customers. This guidance is available here.

Further information about the FCA’s Policy Statement can be found here.

We'll be in touch with you after 25 September 2024.

Please let us know if there’s anything else we can help with in relation to the above. September seems a long time to wait to find out if they pay anything. I am guessing they won't pay anything for the reasons already mentioned in this thread. But should I do anything else or just sit and wait?

September is probably optimistic, the 8 weeks for responding to the complaint will start on 25 Sept... wouldn't be the first time a regulator decides in its initial investigation that action is required but then needs further consultation time to decide how that action should be taken. 


DCA does go both ways too, dealers could waive some/all their commission to get a lower APR. Would be funny if you're then instructed to pay over the extra interest saved by the dealer exercising their discretion. 

DullGreyGuy

CoffeeLady999 said:

I used the MSE online tool to submit for my car finance. My question is what do I do if I don't hear back within the 28 days? I know companies are swamped with enquiries, just don't want to miss doing something.

Did you get an acknowledgement of receipt? If you did do nothing... regulator has said the 8 weeks for a response doesn't start until the 25 September

Nasqueron

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

What happened to people taking personal responsibility for their decisions? Every person who took out one of these loans was told exactly what they would be paying and what the rate of interest would be. If they didn't like it, why didn't they walk away and look elsewhere for another car or another personal loan or both?

It is hardly a novel concept for a car dealer to try to get the maximum amount of cash from a buyer, whether that be in cash, commission, loan rate, extended warranty, service plans, GAP insurance, wheels and tyre cover, paint protection, fabric protection, chip and dent protection and the rest. It is common knowledge among the British public, which is why haggling over a car purchase is almost a national sport.

This wasn't mis-selling, it was mis-buying.

Actually with this one, DCA was miss-selling in that the person could be misled that they only qualified for a certain, more expensive, rate when they should have got better rates - plenty couldn't get better rates or were desperate. 

People who are 'desperate' for a loan are usually a higher lending risk and therefore pay more.  Those are the rules of lending and borrowing and always will be. If they 'couldn't get better rates', what does that tell you about their risk profile as a borrower? 

I suspect most of those who chose this sort of financing were not particularly desperate and didn't really care what the bottom line was (even though the figures were there in black and white for them to see).  If they believed they could meet the monthly payment, they went away happy.  

You're still missing the point - higher risk sure but the DCA setup was still giving them an even higher rate than they qualified for, even those with good finance history.

The DCA setup, in certain cases, worked like this:

Dealer runs finance check
Lender says customer can have X% with commission to dealer based on that rate but where they got more commission with X+1/X+2 etc
Dealer offers customer X+3% so customer is paying more than they should do so dealer gets more commission

Not sure how you can't see that is blatant mis-selling - who would question the figures given people had no idea that DCA was even a thing? Commission for a sale, sure, but the idea that your finance was artificially altered to give more money to the dealer is alien to most. Would many people risk a second credit check for a bank or alternative without knowing the rate they were offered could have been lower if the salesman wasn't greedy? If you need a car for your day to day life and you got offered an affordable rate, why would you even think the dealer was giving you a higher rate?

Last car I got was on 0% and had no add-ons either, but I wasn't a credit risk and had the cash to buy if I needed, doesn't mean everyone is in that position 

I don't believe I am missing the point.  The point is that the customer was offered an APR.  How that APR was arrived at is immaterial (or ought to have been), provided the customer was given the option to take it or leave it, which clearly they were.  

I consider myself to be a pretty savvy consumer and I would not be at all surprised to learn that a dealership were being incentivised to sell me a higher APR on car finance. 

 If I were making a major purchase like a car and I needed to borrow in order to do so, the number of credit checks I was registering would be a secondary consideration to the loan rate I was able to secure, especially if it was going to save me hundreds of pounds in the long run. 

The truth is, most customers neither knew nor cared how the APR figure was arrived at.  Of course they are now going to jump at the prospect of some free cash for filling out a few lines on a form.  Who wouldn't?  I'm all for protecting the consumer, but that should not extend to rewarding laziness, gullibility or indifference.

You need to remember that your average consumer is not savvy or smart and, further, DCA was not known about - people might question a high APR but compared to what? End of the day, multiple dealers have cost consumers money by charging them a higher APR than they qualified for (how would you, as a savvy person, check that was the rate they got from the lender?) in order to get commission for themselves. You cannot compare that to add-on products like alloy wheel cover etc as these aren't required to take the car home

Laura_Norder

Nasqueron said:

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

Nasqueron said:

Laura_Norder said:

What happened to people taking personal responsibility for their decisions? Every person who took out one of these loans was told exactly what they would be paying and what the rate of interest would be. If they didn't like it, why didn't they walk away and look elsewhere for another car or another personal loan or both?

It is hardly a novel concept for a car dealer to try to get the maximum amount of cash from a buyer, whether that be in cash, commission, loan rate, extended warranty, service plans, GAP insurance, wheels and tyre cover, paint protection, fabric protection, chip and dent protection and the rest. It is common knowledge among the British public, which is why haggling over a car purchase is almost a national sport.

This wasn't mis-selling, it was mis-buying.

Actually with this one, DCA was miss-selling in that the person could be misled that they only qualified for a certain, more expensive, rate when they should have got better rates - plenty couldn't get better rates or were desperate. 

People who are 'desperate' for a loan are usually a higher lending risk and therefore pay more.  Those are the rules of lending and borrowing and always will be. If they 'couldn't get better rates', what does that tell you about their risk profile as a borrower? 

I suspect most of those who chose this sort of financing were not particularly desperate and didn't really care what the bottom line was (even though the figures were there in black and white for them to see).  If they believed they could meet the monthly payment, they went away happy.  

You're still missing the point - higher risk sure but the DCA setup was still giving them an even higher rate than they qualified for, even those with good finance history.

The DCA setup, in certain cases, worked like this:

Dealer runs finance check
Lender says customer can have X% with commission to dealer based on that rate but where they got more commission with X+1/X+2 etc
Dealer offers customer X+3% so customer is paying more than they should do so dealer gets more commission

Not sure how you can't see that is blatant mis-selling - who would question the figures given people had no idea that DCA was even a thing? Commission for a sale, sure, but the idea that your finance was artificially altered to give more money to the dealer is alien to most. Would many people risk a second credit check for a bank or alternative without knowing the rate they were offered could have been lower if the salesman wasn't greedy? If you need a car for your day to day life and you got offered an affordable rate, why would you even think the dealer was giving you a higher rate?

Last car I got was on 0% and had no add-ons either, but I wasn't a credit risk and had the cash to buy if I needed, doesn't mean everyone is in that position 

I don't believe I am missing the point.  The point is that the customer was offered an APR.  How that APR was arrived at is immaterial (or ought to have been), provided the customer was given the option to take it or leave it, which clearly they were.  

I consider myself to be a pretty savvy consumer and I would not be at all surprised to learn that a dealership were being incentivised to sell me a higher APR on car finance. 

 If I were making a major purchase like a car and I needed to borrow in order to do so, the number of credit checks I was registering would be a secondary consideration to the loan rate I was able to secure, especially if it was going to save me hundreds of pounds in the long run. 

The truth is, most customers neither knew nor cared how the APR figure was arrived at.  Of course they are now going to jump at the prospect of some free cash for filling out a few lines on a form.  Who wouldn't?  I'm all for protecting the consumer, but that should not extend to rewarding laziness, gullibility or indifference.

You need to remember that your average consumer is not savvy or smart and, further, DCA was not known about - people might question a high APR but compared to what? End of the day, multiple dealers have cost consumers money by charging them a higher APR than they qualified for (how would you, as a savvy person, check that was the rate they got from the lender?) in order to get commission for themselves. You cannot compare that to add-on products like alloy wheel cover etc as these aren't required to take the car home

The average customer didn't need to be savvy or smart.  They simply needed to understand what the total cost would be (e.g. £12k), how much the monthly payments would be (e.g. £200) and the rate of interest they were being charged (e.g. 7.5%APR).  It was very basic stuff, all of which was presented to them by the salesperson, in black and white, before any deal was reached.  They had the option to say, 'yes' or 'no' or to negotiate a better deal. 

As a savvy person, I wouldn't be interested in the rate the dealer got from the lender.  I'd be interested in the rate that was being offered to me by the dealer.  Not acceptable?  Negotiate it down.  Still not acceptable?  Walk away.