Was a mis-sold car loan?

bmbm365

So about 8 years ago I bought a 2nd hand golf for around £9k from Volkswagen.

Now I had the cash, but wanted to pay by credit card so I could take advantage of the cashback offer on my credit card.

Anyway they said i could only pay max £500 on credit card rest debit.

But this is the thing. They said if I take car loan then I will get 2 years free servicing and road side cover. I said I have the cash and can pay for car now. They said thats fine- but if you get car finance then we will throw in these things.

I asked is there an early repayment charge on the loan- they said no.

So what i did was i took the longest term i could so the 1st repayment would be tiny- and as soon as all the documents came through I just paid the loan in full.

So I dont think i qualify for the car loan scandal (or maybe a few quid max). But was I mis-sold the loan given I took it for perks rather then for finance?

And if I have mis-sold- what can I do about it, and what if any compensation would i be entitled to?

TadleyBaggie

Sounds like you made your own choice to get the free servicing, nobody forced to do that.  Can't see how this case of being mis-sold.

bmbm365

TadleyBaggie said:

Sounds like you made your own choice to get the free servicing, nobody forced to do that.  Can't see how this case of being mis-sold.

Thats fair enough. But why not give me perks of free car servicing and road cover, and tax for a year- If i wanted to pay in cash?

Why does car finance only let you obtain these perks?

Ayr_Rage

If you take the finance the dealer gets commission, so that is how they can sweeten the deal.

Your deal sounds completely transparent and worked very much in your favour.

The current FCA investigation is about discretionary commission where there was possible collusion between the dealer and finance company over interest rates.

dunstonh

Anyway they said i could only pay max £500 on credit card rest debit.

That is not unusual due to the increased costs of handling credit cards over debit card.

So what i did was i took the longest term i could so the 1st repayment would be tiny- and as soon as all the documents came through I just paid the loan in full.

Sensible 

So I dont think i qualify for the car loan scandal (or maybe a few quid max). But was I mis-sold the loan given I took it for perks rather then for finance?

a) there is no scandal.    Indeed, at the moment, there is an appeal as there is a believe that the courts her erred in their decision.  And no FCA rules were broken.    If consumers get anything, it will be down to luck on the part of the consumer rather than an explicit wrongdoing.
b) it doesnt sound like you were missold because you knew exactly what they offered and you made an informed choice.

Thats fair enough. But why not give me perks of free car servicing and road cover, and tax for a year- If i wanted to pay in cash?

They wouldn't have earned the commission from the lender if they did that.    
It is also worth noting that people who repay the loan very quickly typically trigger a clawback on the commission.   

Why does car finance only let you obtain these perks?

Because of the earnings from the loan.

bmbm365

Thanks everyone

Grumpy_chap

bmbm365 said:

TadleyBaggie said:

Sounds like you made your own choice to get the free servicing, nobody forced to do that.  Can't see how this case of being mis-sold.

Thats fair enough. But why not give me perks of free car servicing and road cover, and tax for a year- If i wanted to pay in cash?

Why does car finance only let you obtain these perks?

Because there is money to be made through finance and most people once they have the finance will pay the interest through the full term.  The customer incentives are funded through that interest.  The small number of people that both intend to and actually do clear the finance very early in the term do not lessen the fact that, overall, the finance products sold generate income.

AIUI, the mis-selling issue is to do with the introducer getting variable commission based on interest rate and not offering the customer the most favourable interest rate that the customer could achieve from that loan provider.  Does not sound like that is the issue you are considering.

RogerPensionGuy

Reading between the lines, the car finance saga will indeed be a monster and looks like its getting bigger and bigger in scope.

The PPI scandal and compensation was a few years back when society wasn't so connected and free flowing on the Internet.

The appeal process will just attract more attention from all parties and the easy compensation companies people use will just gear up ready for the green lights after the review which looks destined to confirm compensation will flow. 

With the scope opening wider, this will be bigger than the PPI saga. 

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https://www.finance-monthly.com/2024/12/car-finance-scandal-could-eclipse-ppi-warns-city-regulator/