Car dealership refuses to take loan from bank as payment

Muzzip

My Son has recently been refused to purchase a car from a dealership as they will not accept a direct payment from his bank as they deem it 3rd party finance, they will only accept a payment from his personal account or one of their financial packages. He has an agreed loan to purchase the car with the Halifax of £17000, ( the car is £25k) he cannot get this as a personal loan as he is only 19 and little history , they will loan him the money when it's a car loan as they can attach the car as an asset.  The rate of their loan or the pcp the dealer is selling would cost my son over an extra £3000 in interest over the term. The company say it's their policy not to accept 3rd party finance, I have emailed twice to clarify but so far it seems they do not want to put it in writing what they are saying to him on the phone. Is this practice still legal? and could I raise it with the FCA or trading standards as it seems a bullying tactic to take their finance. 

Mark_d

It's certainly unfair but I doubt it's illegal.  If it was me I'd go to a different dealership.

A 19 year old buying a £25k car is not what I'd call money-saving.  The most I've ever spent on a car was £4k.

If your son is worried about £3k being wasted perhaps he should think about how quickly his car will depreciate.  If he wants a newish car maybe there are rental plans, including insurance, which might be more cost effective.

For the £8k your son would use as a deposit - that would cover the cost of a used Toyota Prius with less than 60k miles on the clock.

FlorayG

I would expect they can do anything they want - it's their car, if they don't want to sell it on your son's terms then he should tell them the deal is off and see what they say to that

Herzlos

The bank paying the dealer direct is pretty standard. That's how I paid for 2 of my last 3 cars.

The dealership presumably just wants him to take out their finance. I suspect they'll back down if you walk away.

I'd find a different dealership and a cheaper car given he's 19 and has little history. As mentioned, you can get a decent car with the £8k deposit he has.

Mildly_Miffed

Muzzip said:

My Son has recently been refused to purchase a car from a dealership as they will not accept a direct payment from his bank as they deem it 3rd party finance, they will only accept a payment from his personal account or one of their financial packages. He has an agreed loan to purchase the car with the Halifax of £17000, ( the car is £25k) he cannot get this as a personal loan as he is only 19 and little history , they will loan him the money when it's a car loan as they can attach the car as an asset.  The rate of their loan or the pcp the dealer is selling would cost my son over an extra £3000 in interest over the term. The company say it's their policy not to accept 3rd party finance, I have emailed twice to clarify but so far it seems they do not want to put it in writing what they are saying to him on the phone. Is this practice still legal? and could I raise it with the FCA or trading standards as it seems a bullying tactic to take their finance. 

You can't raise it, no. The dealer shouldn't even be talking to you about this, nor should the FCA or TS, since you are not party to the contract.

If your son is mature and adult enough to be taking out a £17k loan to buy a £25k car, he does not need a parent stepping in every time something gets a bit awkward.

The dealer can accept or refuse whatever source of funding they wish.

DullGreyGuy

Muzzip said:

My Son has recently been refused to purchase a car from a dealership as they will not accept a direct payment from his bank as they deem it 3rd party finance, they will only accept a payment from his personal account or one of their financial packages. He has an agreed loan to purchase the car with the Halifax of £17000, ( the car is £25k) he cannot get this as a personal loan as he is only 19 and little history , they will loan him the money when it's a car loan as they can attach the car as an asset.  The rate of their loan or the pcp the dealer is selling would cost my son over an extra £3000 in interest over the term. The company say it's their policy not to accept 3rd party finance, I have emailed twice to clarify but so far it seems they do not want to put it in writing what they are saying to him on the phone. Is this practice still legal? and could I raise it with the FCA or trading standards as it seems a bullying tactic to take their finance. 

The practice is questionable under a number of guidelines etc but its subject to interpretation rather than being strictly illegal. 

The FCA does not investigate individual consumer issues so isn't an open route for you. If you were to google the topic you'll find a number of trade groups etc have previously raised the matter to the FCA but to date the FCA hasn't decided to do any investigations or issue a policy statement on the matter. 

Some do report that by using a credit broker they were able to get the dealership to accept the payments but inevitably the brokers charges move it to somewhere between the direct lender and the dealerships lender. 

Muzzip

Well slightly disappointed by some comments, any parent still looks out for their child regardless of age and it's his choice what car he want to buy with his earnings, my question was about the legality of the dealer and not my sons life choices or how to parent, waste of time having a forum if it's full of slanted views from behind a keyboard.

la531983

Muzzip said:

Well slightly disappointed by some comments, any parent still looks out for their child regardless of age and it's his choice what car he want to buy with his earnings, my question was about the legality of the dealer and not my sons life choices or how to parent, waste of time having a forum if it's full of slanted views from behind a keyboard.

Its hardly being a keyboard warrior to point out that you emailing them is pointless, as he is an adult and they can only discuss things with him (in writing)

sheslookinhot

Muzzip said:

Well slightly disappointed by some comments, any parent still looks out for their child regardless of age and it's his choice what car he want to buy with his earnings, my question was about the legality of the dealer and not my sons life choices or how to parent, waste of time having a forum if it's full of slanted views from behind a keyboard.

I wouldn’t worry about it too much. 

Rather than say nothing, some folks can’t help themselves in dishing out some good old life and morals advice. Nothing about the original question.

Muzzip

la531983 said:

Muzzip said:

Well slightly disappointed by some comments, any parent still looks out for their child regardless of age and it's his choice what car he want to buy with his earnings, my question was about the legality of the dealer and not my sons life choices or how to parent, waste of time having a forum if it's full of slanted views from behind a keyboard.

Its hardly being a keyboard warrior to point out that you emailing them is pointless, as he is an adult and they can only discuss things with him (in writing)

Thanks for your reply, my email to the company was a general email to sales to ask about their policy not to take 3rd party payments even directly from a high st bank,  this is a general enquiry that anyone can ask and has no bearing on the relationship between the seller and customer as it's a 'policy' question.   I've spoken with Audi main dealer and they take all payments direct from bank where the bank is providing the finance, all main dealership's do this.  The non response from the used dealership only shows that they are only interested in selling cars with finance attached via them, they know that this practice may be legal but is another way of adding profit and commission to the sale of the car, this reduces the free market rights to customers with external and better finance arrangements.  As this is a money saving forum I thought it right to highlight and ask the question is it legal?  The car with a window price of 25k car would cost over 33k using the dealer finance package, needless to say he will not be buying that car nor any car from a dealership who have this restriction. 

Car_54

Muzzip said:

Well slightly disappointed by some comments, any parent still looks out for their child regardless of age and it's his choice what car he want to buy with his earnings, my question was about the legality of the dealer and not my sons life choices or how to parent, waste of time having a forum if it's full of slanted views from behind a keyboard.

That sounds like the very definition of an internet forum