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:

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.

You seem to wish to argue about something like everyone is you and cannot have been mis-sold which is clearly wrong

The FCA will determine if there was an issue

CoffeeLady999

DullGreyGuy said:

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

No haven't had anything from them

Jinglish

I don’t get why people think it’s ok because “you can walk away” or “well you knew the monthly payments” that’s not the point. In my view its not only miss-selling its actually stealing or being ripped off. It was deliberately hidden from the customer which its wrong regardless if you can afford it or not.

Laura_Norder

Jinglish said:

I don’t get why people think it’s ok because “you can walk away” or “well you knew the monthly payments” that’s not the point. In my view its not only miss-selling its actually stealing or being ripped off. It was deliberately hidden from the customer which its wrong regardless if you can afford it or not.

It wasn't hidden though, was it?  When a dealer says to you, "Seven point five percent is the APR we are offering you on finance.", that is very clear.  By no stretch of the imagination is it stealing or ripping off.  Who has ever asked for a precise breakdown as to where their car loan payments will be going?  They are only interested in the bottom line.

The FSA is wrong on this and if it orders 'compensation' to those who had DCA on their finance, it will simply be rewarding fecklessness or indifference.

TheBanker

Jinglish said:

I don’t get why people think it’s ok because “you can walk away” or “well you knew the monthly payments” that’s not the point. In my view its not only miss-selling its actually stealing or being ripped off. It was deliberately hidden from the customer which its wrong regardless if you can afford it or not.

How is it stealing? The customer knew the rate they were being offered. They knew the monthly cost. They should have known that there are other ways of financing a purchase. And ultimatley they must have been happy with the rate offered otherwise they would not have signed the agreement.

Would you expect to know how much the dealer had purchased the car for, and how much they'd spent on the MOT etc, so that you could decide if you thought their profit margin was acceptable? Or do you base your decision on the price of the car, less any discount you can negotiate, and taking into account  the price of similar cars being sold elsewhere? If you part-ex, do you go back to find out how much they sold your car on for to make sure their profit margin was reasonable?

When I bought my last but one car, I was borrowing to pay for it. Before I went anywhere near the dealer, I got a personal loan quote from my bank. Only a soft search and it gave me an idea of how much a loan would cost. When I found the right car, I let the dealer quote me for finance. I said his quote was too expensive. He did the "I'll talk to the Manager" thing and I ended up with a deal that cost me less overall than the bank loan would have. Maybe the first quote included commission which they reduced/removed to secure the deal. Maybe they did something else. I don't really care - I just know I was happy with the deal and presumably the salesman was as well.

You might say "ah, but you're a banker so you know how these things work". Yes, that's true, but Martin Lewis does a pretty good job of explaining things. 

TheBanker

Laura_Norder said:

Jinglish said:

I don’t get why people think it’s ok because “you can walk away” or “well you knew the monthly payments” that’s not the point. In my view its not only miss-selling its actually stealing or being ripped off. It was deliberately hidden from the customer which its wrong regardless if you can afford it or not.

It wasn't hidden though, was it?  When a dealer says to you, "Seven point five percent is the APR we are offering you on finance.", that is very clear.  By no stretch of the imagination is it stealing or ripping off.  Who has ever asked for a precise breakdown as to where their car loan payments will be going?  They are only interested in the bottom line.

The FSA is wrong on this and if it orders 'compensation' to those who had DCA on their finance, it will simply be rewarding fecklessness or indifference.

Presumably you mean the FCA - I don't think the Food Standards Agency are involved

I don't think the FCA were wrong to introduce new regulations. The problem is that the FOS has applied the new rules to transactions that were agreed under the old rules. The FCA are right to pause complaint handling while they investigate, because otherwise we'd have seen a repeat of PPI, and may have even seen some of the finance companies go out of business. 

The problem the FCA have now is that they either have to say the FOS was wrong, or they have to accept that this situation will be repeated every time they introduce new regulations to try to improve consumer protection. 

Hoenir

Nasqueron said:

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 

Smoke and mirrors. Didn't you push for a cash discount? 

Nasqueron

Hoenir said:

Nasqueron said:

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 

Smoke and mirrors. Didn't you push for a cash discount? 

I was happy with the addons and specs of the car for the price 

Nasqueron

Laura_Norder said:

Jinglish said:

I don’t get why people think it’s ok because “you can walk away” or “well you knew the monthly payments” that’s not the point. In my view its not only miss-selling its actually stealing or being ripped off. It was deliberately hidden from the customer which its wrong regardless if you can afford it or not.

It wasn't hidden though, was it?  When a dealer says to you, "Seven point five percent is the APR we are offering you on finance.", that is very clear.  By no stretch of the imagination is it stealing or ripping off.  Who has ever asked for a precise breakdown as to where their car loan payments will be going?  They are only interested in the bottom line.

The FSA is wrong on this and if it orders 'compensation' to those who had DCA on their finance, it will simply be rewarding fecklessness or indifference.

Again, the ARTIFICIAL INCREASE was hidden, not the interest in general

Deliberately offering the customer a higher rate of interest than they actually qualified, so they pay a lot more, purely so the dealer gets more money is fundamentally dishonest.

I agree that the FOS should not be retrospectively applying rules that weren't in force, just as they did with PPI

I don't agree that the FCA shouldn't be able to review this and decide.

The FOS is a law unto themselves with a consumer bias, the FCA should be deciding this and if they decide no rules were broken, I do hope Martin and co pay compensation for the admin costs that will be passed onto customers for all the spurious complaints being sent in now, even though sites like MSE knew before they started pushing this, that the process was on hold and sending in complaints now was pointless.

Laura_Norder

Nasqueron said:

Laura_Norder said:

Jinglish said:

I don’t get why people think it’s ok because “you can walk away” or “well you knew the monthly payments” that’s not the point. In my view its not only miss-selling its actually stealing or being ripped off. It was deliberately hidden from the customer which its wrong regardless if you can afford it or not.

It wasn't hidden though, was it?  When a dealer says to you, "Seven point five percent is the APR we are offering you on finance.", that is very clear.  By no stretch of the imagination is it stealing or ripping off.  Who has ever asked for a precise breakdown as to where their car loan payments will be going?  They are only interested in the bottom line.

The FSA is wrong on this and if it orders 'compensation' to those who had DCA on their finance, it will simply be rewarding fecklessness or indifference.

Again, the ARTIFICIAL INCREASE was hidden, not the interest in general

Deliberately offering the customer a higher rate of interest than they actually qualified, so they pay a lot more, purely so the dealer gets more money is fundamentally dishonest.

I agree that the FOS should not be retrospectively applying rules that weren't in force, just as they did with PPI

I don't agree that the FCA shouldn't be able to review this and decide.

The FOS is a law unto themselves with a consumer bias, the FCA should be deciding this and if they decide no rules were broken, I do hope Martin and co pay compensation for the admin costs that will be passed onto customers for all the spurious complaints being sent in now, even though sites like MSE knew before they started pushing this, that the process was on hold and sending in complaints now was pointless.

A car dealer trying to make a bit more money on a deal?  This has to be the most unremarkable discovery in the history of retail sales and finance.