Martin Lewis: Car finance mis-selling update – complaint decisions delayed, redress "more likely"

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The outcome of a major investigation into hidden, unfair car finance commission will be pushed back from September 2024 to May 2025, it's been announced. But the regulator behind the probe has told MoneySavingExpert.com founder Martin Lewis that payouts to drivers are now "more likely".

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Martin Lewis: Car finance mis-selling update – complaint decisions delayed but redress payments now "more likely"

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Nasqueron

Oh well, higher payments for the rest of us if we buy cars in the future

prowla

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

MattMattMattUK

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Specifically if the new car is bought on finance. The finance companies as part of their business model will need to increase their revenue and gross profits to cover the additional cost of payouts, which will mean higher interest rates charged on new finance products. 

DullGreyGuy

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Massive operational costs to process all the complaints irrespective if they are justified or not and then large amounts of formerly booked earnings having to be refunded leaves a big black hole in the accounts for the next few years. You either issue your shareholders with a profit warning or you increase your revenues to make up for the costs. Most companies are likely to do the later. 

Hence those that take out future credit agreements are likely to pay slightly more to cover these costs

Nasqueron

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Car companies will want to make back any money lost out on these grifting exercises (even the admin charges for dealing with people who had no DCA, or had 0% finance etc add up). You don't think the car firms will just suck up the cost of any refunds for a practice that, while undoubtedly shady, wasn't banned at the time? It's the same as PPI, sites like this and the CMC leeches encouraged everyone and their wife to chuck in nonsense PPI complaints which companies ended up paying as it was cheaper than fighting them all, even those without merit. They make the money back by reducing benefits or increasing costs to the rest of us.

Hoenir

Add Airline compensation to the list of additional costs will be borne by the consumers using the service. 

DullGreyGuy

Hoenir said:

Add Airline compensation to the list of additional costs will be borne by the consumers using the service. 

All costs of doing business are ultimately borne by the customers, voluntary and not.... uninsured drivers, shoplifters, taxes, the list is nearly endless. 

Hoenir

DullGreyGuy said:

Hoenir said:

Add Airline compensation to the list of additional costs will be borne by the consumers using the service. 

All costs of doing business are ultimately borne by the customers, voluntary and not.... uninsured drivers, shoplifters, taxes, the list is nearly endless. 

I was merely musing about areas where the culture is increasingly for inconvenience compensation. Rather than costs that have always been costed into product and service pricing. 

prowla

MattMattMattUK said:

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Specifically if the new car is bought on finance. The finance companies as part of their business model will need to increase their revenue and gross profits to cover the additional cost of payouts, which will mean higher interest rates charged on new finance products. 

Nasqueron said:

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Car companies will want to make back any money lost out on these grifting exercises (even the admin charges for dealing with people who had no DCA, or had 0% finance etc add up). You don't think the car firms will just suck up the cost of any refunds for a practice that, while undoubtedly shady, wasn't banned at the time? It's the same as PPI, sites like this and the CMC leeches encouraged everyone and their wife to chuck in nonsense PPI complaints which companies ended up paying as it was cheaper than fighting them all, even those without merit. They make the money back by reducing benefits or increasing costs to the rest of us.

Well yes, but...

Their prices still have to be competitive.

Hoenir

prowla said:

MattMattMattUK said:

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Specifically if the new car is bought on finance. The finance companies as part of their business model will need to increase their revenue and gross profits to cover the additional cost of payouts, which will mean higher interest rates charged on new finance products. 

Nasqueron said:

prowla said:

Nasqueron said:

Oh well, higher payments for the rest of us if we buy cars in the future

Why would that be?

Car companies will want to make back any money lost out on these grifting exercises (even the admin charges for dealing with people who had no DCA, or had 0% finance etc add up). You don't think the car firms will just suck up the cost of any refunds for a practice that, while undoubtedly shady, wasn't banned at the time? It's the same as PPI, sites like this and the CMC leeches encouraged everyone and their wife to chuck in nonsense PPI complaints which companies ended up paying as it was cheaper than fighting them all, even those without merit. They make the money back by reducing benefits or increasing costs to the rest of us.

Well yes, but...

Their prices still have to be competitive.

Build them in China at a fraction of the labour cost of US and European plants. .