Car finance - hidden commission payments
Discussion
sugerbear said:
Used car (one year old at the time of purchase).
This is the response from VW - there is still a chance DCA didnt apply as they continue to investigate.
“ Based on our initial review we believe a Discretionary Commission Arrangement may apply to your agreement and as such the pause applies to your complaint. If our investigations find a Discretionary Commission Arrangement does not apply to your agreement we will respond to your complaint within the normal 8 week timeline.
Based on current FCA instructions the pause on DCA complaints will be for a period of 37 weeks until 25 September 2024 and we are not required to respond to DCA related complaints until after this date, at which point either a further pause may apply or the normal 8 week timeframe will start.
Please be assured that during this time we will investigate your complaint and collect information to support us in reaching a resolution. There’s no need for you to contact us again, we’ll contact you as soon as we are able to share the outcome of our investigation.”
Interesting - all the companies involved /affected appear to be treating each contact somewhat differently. This is the response from VW - there is still a chance DCA didnt apply as they continue to investigate.
“ Based on our initial review we believe a Discretionary Commission Arrangement may apply to your agreement and as such the pause applies to your complaint. If our investigations find a Discretionary Commission Arrangement does not apply to your agreement we will respond to your complaint within the normal 8 week timeline.
Based on current FCA instructions the pause on DCA complaints will be for a period of 37 weeks until 25 September 2024 and we are not required to respond to DCA related complaints until after this date, at which point either a further pause may apply or the normal 8 week timeframe will start.
Please be assured that during this time we will investigate your complaint and collect information to support us in reaching a resolution. There’s no need for you to contact us again, we’ll contact you as soon as we are able to share the outcome of our investigation.”
I guess in reality until the FCA review is done and dusted its more a case of just ensuring your initial email is sent and then as ML said sit back and wait for proper conversation's.
MSE published an update email recently which assume people have seen.
djc206 said:
OddCat said:
In the normal world then, yes, moaning about the finance broker getting a £2,000 commission when you got £5,000 off the car would be mental. To unwind that you'd end up PAYING £3,000.
But we don't live in a normal world any more. We live in an entitled world where moral hazard no longer exists, no one has to be savvy any more to get the best deals, everyone thinks they can have the penny and the bun, and people will sell their own granny for a bit of compo at every opportunity.
No doubt this comment will go down like a cup of cold sick among the claimants on here
bBut we don't live in a normal world any more. We live in an entitled world where moral hazard no longer exists, no one has to be savvy any more to get the best deals, everyone thinks they can have the penny and the bun, and people will sell their own granny for a bit of compo at every opportunity.
No doubt this comment will go down like a cup of cold sick among the claimants on here
ks would it. If I sign up to receive a £5k discount and it turns out the dealer has nicked £2k of that for himself through some sneaky and illegal method then I’ve lost £2k, I’ve not gained £3k because the deal was sold as £5k off. You don’t have to like it but this isn’t about fecklessness it’s about dealers doing dodgy st and being caught out by the rather late to the party FCA.The dealers took the moral risk in doing something quite clearly immoral and also outwith the rules they were bound by. That risk hasn’t paid off, tough titties
What was said was, if the deal is done without the commission, tto the dealer and no discount applied, the saving would be the £2000 commission. And you would have to pay £3000 extra overall.
Sometimes, the dealer earning a commission allows a better deal to be offered to the buyer.
wargriff said:
The deal you get, would still be £5000 off the price of the car. The commission payment to the dealer is seperate. So you dont only get £3000 off.
What was said was, if the deal is done without the commission, tto the dealer and no discount applied, the saving would be the £2000 commission. And you would have to pay £3000 extra overall.
Sometimes, the dealer earning a commission allows a better deal to be offered to the buyer.
It’s not separate because the interest rate is being adjusted to claw back that incentive from the customer to pass on to the dealer as commission. In that example they’re giving with one hand and taking with the other.What was said was, if the deal is done without the commission, tto the dealer and no discount applied, the saving would be the £2000 commission. And you would have to pay £3000 extra overall.
Sometimes, the dealer earning a commission allows a better deal to be offered to the buyer.
Hugo Stiglitz said:
Wow. Absolutely pondlife.
I remember seeing an ad recently that said 'car can only be purchased using our finance' on autotrader
To be fair that will just mean no external third party brokers of your own choosing. Many brokers only make money from higher rates anyway which is inkeeping with the complaints here.I remember seeing an ad recently that said 'car can only be purchased using our finance' on autotrader
My own car sales business won't work with external brokers. We have direct lenders and brokers, we have access to all the major and lots of lesser known companies. And we know the quality and are happy to partner with those companies.
These shower of s
t call centre finance companies often promise the world, fail to deliver and then its the dealer getting it in the neck.Its like being Joe bloggs plumbing and being the best in area, then subbing out to unknown workmen many of who are rogues. Just means you get the headache.
OddCat said:
Where getting the discount was contingent upon taking the finance, did people think the dealer / manufacturer was, at their own expense, just being kind to Black Horse Finance ?
If someone offered you a £5000 discount on condition that you take finance and you know you can cancel the finance 14 days after you have signed up and you have the money to pay off the finance would you - A) Refuse the discount / Finance deal and pay £5000 more for the item
B) Take the discount and pay off the finance within 14 days
C) Take the discount and continue the finance deal to the end of it's term as you would be worried about the financial health of the dealership / finance company
djc206 said:
It’s not separate because the interest rate is being adjusted to claw back that incentive from the customer to pass on to the dealer as commission. In that example they’re giving with one hand and taking with the other.
If it is a new car, the discount is a manufacurer provided discount, the finance rate is provided by the finance company.If it is a finance deposit allowance, it will be paid if you use the finance. The rate will be decided by the finance company, so not adjustable. The finance commission payment would not make any difference to the charged rate, it has already been decided.
If it is a used car, the rate would impact the level of commision paid, but to provide a £5000 discount, and £2000 commission, you would need to have a very large balance and a very very large rate. The large APR on the loan, would put any buyer off.
sugerbear said:
If someone offered you a £5000 discount on condition that you take finance and you know you can cancel the finance 14 days after you have signed up and you have the money to pay off the finance would you -
A) Refuse the discount / Finance deal and pay £5000 more for the item
B) Take the discount and pay off the finance within 14 days
C) Take the discount and continue the finance deal to the end of it's term as you would be worried about the financial health of the dealership / finance company
If you paid the loan off within the 14 days, exercising the 'right to withdraw' clause. You would have to put the dealership back in the same position. So the finance provided deposit, would need to be paid by you. A) Refuse the discount / Finance deal and pay £5000 more for the item
B) Take the discount and pay off the finance within 14 days
C) Take the discount and continue the finance deal to the end of it's term as you would be worried about the financial health of the dealership / finance company
You would need to pay back after the 14 days to get the benefit.
Ford Credit, provide a finance deposit conttribution on selected cars. At present £1250 on a Focus. This can be on a 2 year ,0% PCP. So if you finance, it is £1250 cheaper. And after 14days, you can pay off. This is in addition to any discounts provided.
People still pay cash and pay the extra £1250.
sugerbear said:
OddCat said:
Where getting the discount was contingent upon taking the finance, did people think the dealer / manufacturer was, at their own expense, just being kind to Black Horse Finance ?
If someone offered you a £5000 discount on condition that you take finance and you know you can cancel the finance 14 days after you have signed up and you have the money to pay off the finance would you - A) Refuse the discount / Finance deal and pay £5000 more for the item
B) Take the discount and pay off the finance within 14 days
C) Take the discount and continue the finance deal to the end of it's term as you would be worried about the financial health of the dealership / finance company
Obviously, in reality, you'd be retarded not to choose option B (assuming this didn't mean you had to pay back the discount).
The people claiming did option D:
D) Take the discount, don't clear the finance, be lazy (and not even slightly savvy) by not even looking at cheaper options to clear the finance, and keep your fingers crossed that some technicality later on will result in some kind of refund.
Oddcats option D
D) Take the discount, don't clear the finance, be lazy (and not even slightly savvy) by not even looking at cheaper options to clear the finance, and keep your fingers crossed that some technicality later on will result in some kind of refund.
My option E.
Discount may or may not have been available but finance rate may have been acceptable , don’t clear the finance by being savvy ie letting your existing money work for you therefore offsetting said finance cost and in some cases completely so.
Appreciate that OC has no skin in the game and wants to believe what he wants to believe but irrespective, regulations are just that and at this stage no one knows if they have been overcharged due to hidden commission although the FCA seems to think 40% of buyers possibly were.
IF I get any money back ( and that’s a big IF ) I’ll put that into another car.
D) Take the discount, don't clear the finance, be lazy (and not even slightly savvy) by not even looking at cheaper options to clear the finance, and keep your fingers crossed that some technicality later on will result in some kind of refund.
My option E.
Discount may or may not have been available but finance rate may have been acceptable , don’t clear the finance by being savvy ie letting your existing money work for you therefore offsetting said finance cost and in some cases completely so.
Appreciate that OC has no skin in the game and wants to believe what he wants to believe but irrespective, regulations are just that and at this stage no one knows if they have been overcharged due to hidden commission although the FCA seems to think 40% of buyers possibly were.
IF I get any money back ( and that’s a big IF ) I’ll put that into another car.
alscar said:
sugerbear said:
When / if I get a payout I will be heading to an online travel agent for a couple of weeks of winter sunshine. Should be enough for Dubai.
This is exaclty what I had planned when I took out the car finance in 2015.
This is exaclty what I had planned when I took out the car finance in 2015.
PlywoodPascal said:
Reply from BMW finance, saying they cannot locate the agreements and asking for names (not changed), postcodes (included originally), DOB, size of monthly payments.
Wonder if its just a filter to try and fob people off.
VW/Audi have so far responded to 2 of my 3 enquiries. I don’t know which agreement they’re referring to but I’d guess it’s one of the earlier ones so either 2011 or 2012 that they’ve said might have been affected. The other they said wasn’t which I’d guess was the last agreement I had with them from 2014 on a new car sold via a campaign on a fixed % deal.Wonder if its just a filter to try and fob people off.
Worth pursuing.
VWFS just sent me 3 separate emails on 3 agreements saying no DCA ‘s in place.
They haven’t as yet responded on the 2 other ones I had ( technically PFS but now VW) which I think were the 2 “ oldest “.
Nothing at all as yet from BMW although still within their auto reply of 88 days to reply or whatever it was.
They haven’t as yet responded on the 2 other ones I had ( technically PFS but now VW) which I think were the 2 “ oldest “.
Nothing at all as yet from BMW although still within their auto reply of 88 days to reply or whatever it was.
anonymous said:
[redacted]
My post was tongue in cheek and it does depend on the amount borrowed. I know that I borrowed quite a bit on PCP. Even a small uplift in interest of 3% on £20,000 / over 24 months would come to about £1200, but on top the finance company will need to add a flat rate of 8% per year which if the agreement was eight years old would be another £750 on top. I have no idea if a hidden payment was added in my case and I have no idea how much extra was added as they are still investigating but a figure of 1k to 2k wouldn't be out of range for an average family car in my opinion.
sugerbear said:
My post was tongue in cheek and it does depend on the amount borrowed. I know that I borrowed quite a bit on PCP. Even a small uplift in interest of 3% on £20,000 / over 24 months would come to about £1200, but on top the finance company will need to add a flat rate of 8% per year which if the agreement was eight years old would be another £750 on top.
I have no idea if a hidden payment was added in my case and I have no idea how much extra was added as they are still investigating but a figure of 1k to 2k wouldn't be out of range for an average family car in my opinion.
Isle of Wight maybe then ?I have no idea if a hidden payment was added in my case and I have no idea how much extra was added as they are still investigating but a figure of 1k to 2k wouldn't be out of range for an average family car in my opinion.
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