Motor Finance - probe

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Sat 13 Apr 2024 15:50
Motor Finance - probe - Xileno

I didn't pay much attention to this when it surfaced earlier in the year as I have so far always bought my cars outright but I see it has popped up again on the BBC website so gave it longer read.

www.bbc.co.uk/news/business-68797646

I'm struggling with the issue here. Even if some dealers adjusted the interest rate up to increase their commission, the consumer still knew what the final amount was?

Anyone have a view on it or is this the next PPI?

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Sat 13 Apr 2024 16:35
Motor Finance - probe - leaseman

Since when I first joined the Motor Finance business, with Anglo Auto Finance, in 1972, commission paid to motor dealers for introductions was part and parcel of the industry.

Commission was part of the dealer's business plan and often cars were sold at a paper loss, including over-inflated part exchange prices to cover negative equity.

At the enactment of the 1974 Consumer Credit Act, in 1984, APR (Annual percentage Rate) had to be shown on every Regulated Agreement.

My personal opinion is that this is another non-problem invented to line the pockets of a shark-infested pool of lawyers.

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Sat 13 Apr 2024 16:38
Motor Finance - probe - SLO76
“ My personal opinion is that this is another non-problem invented to line the pockets of a shark-infested pool of lawyers.”

My opinion also.
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Sat 13 Apr 2024 18:22
Motor Finance - probe - John F
“ My personal opinion is that this is another non-problem invented to line the pockets of a shark-infested pool of lawyers.” My opinion also.

Ditto. Grist to the mill of our burgeoning barristocracy ....wickedly expensive and paralysingly unproductive - viz. Post Office scandal.

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Sat 13 Apr 2024 20:38
Motor Finance - probe - Engineer Andy
“ My personal opinion is that this is another non-problem invented to line the pockets of a shark-infested pool of lawyers.” My opinion also.

Rarely are 'enquiries' of decent use and especially good value for money. Rather like on episodes of 'Yes, Minister' or 'Yes, Prime Minister', politicians will know that its all about who the chairperson is and the remit of the enquiry or report.

The outcome will mostly, if nigh on always be known from the outset of it being set up, so the rest is theartre, as you say, to line the pockets of and give free publicity to lawyers and other hanger-oners, plus lots of nice copy for the media.

Sadly, it also appears that we (via higher costs for the rest of us) have to now pay for people who don't bother reading Ts & Cs, ask reasonable questions or, if they don't have much knowledge or capability, have someone who does with them to help / advise them.

I also believe that this enquiry / report will be used as a smokescreen to deflect from the fallout when (not if) the inevitable crash occurs (I think it's already started with the sizeable increase in depreciation of cars, especially EVs) due to millions of people defaulting on car loans (especially PCP deals) because so many debts get 'rolled over' (getting higher and higher) to the next purchase.

This combined with whenever the coming economic depression (held back by very creative money printing) finally arrives. It'll be sub-prime home loans on steroids if you include everything else, especially if the housing market collapses as probably would.

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Sun 14 Apr 2024 09:11
Motor Finance - probe - Orb>>

Well done.

The shark infested pool of lawyers exists, but just ready for the next bandwagon.

I'll be brutally honest.

I don't care.

I have acquaintancesstruggling to pay their way below market rent. Just got a brand new Kia Sportage on the never never.. all got iPhones. The full netflix sky package. Electric on a prepayment meter.

Couple of years ago did an IVA and now starting again.

People go into these things eyes wide open

Let them take the consequences.

All sellers of material goods cars houses phones etc finance want the same thing.

Our money.

I gave a very rude reply to a close friend who said I should be spending my money..

Edited by Orb>> on 14/04/2024 at 09:13

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Sun 14 Apr 2024 18:38
Motor Finance - probe - Engineer Andy

Well done.

The shark infested pool of lawyers exists, but just ready for the next bandwagon.

I'll be brutally honest.

I don't care.

I have acquaintancesstruggling to pay their way below market rent. Just got a brand new Kia Sportage on the never never.. all got iPhones. The full netflix sky package. Electric on a prepayment meter.

Couple of years ago did an IVA and now starting again.

People go into these things eyes wide open

Let them take the consequences.

All sellers of material goods cars houses phones etc finance want the same thing.

Our money.

I gave a very rude reply to a close friend who said I should be spending my money..

The problem is that those of us who are careful how we spend will pay a severe price as well, though increased inflation, mortgage rates and eventually the personal impact of an economic depression. Whilst some of them may not affect yourself because you've likely paid off your mortgage, other issues such as drastic cuts to government spending, sky-high inflation etc would, because it impacts older people on a fixed income.

I do agree that the greatest affected mostly have just themselves to blame, but as with many things these days (including bank / big business failures), all too often, the general taxpayer foots the bill for the excesses and big mistakes of others. Even the law now means no consequences for going bankrupt, with bills footed by the rest of us, etc, etc.

What used to be a small safety net is now a huge encouragement for people to be reckless and often law-breaking.

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Sat 13 Apr 2024 18:22
Motor Finance - probe - RT

I didn't pay much attention to this when it surfaced earlier in the year as I have so far always bought my cars outright but I see it has popped up again on the BBC website so gave it longer read.

www.bbc.co.uk/news/business-68797646

I'm struggling with the issue here. Even if some dealers adjusted the interest rate up to increase their commission, the consumer still knew what the final amount was?

Anyone have a view on it or is this the next PPI?

The issue is that the customer didn't know the interest rate was negotiable.

There's no reason for lawyers to be involved - go direct to the finance company.

The Martin Lewis website has useful information on this issue and a template letter to send to the finance company.

Edited by RT on 13/04/2024 at 18:25

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Sun 14 Apr 2024 10:36
Motor Finance - probe - Adampr

For me, the issue with this (like PPI) zis that more regulation and more litigation means that people increasingly expect some kind of protection from risk and make stupid decisions.

I am far from immune from this myself, but you really have to remember that every time someone tries to sell you something, either directly or as a broker, they stand to make money from you.

Of course car dealers acting as finance brokers are getting a cut. And of course their interest lies in getting that cut. They couldn't care less whether you can afford it. That doesn't make them bad people; it's just the economics of it. There are a million ways to stop that from being the case but they would be considered 'anti-business' so not encouraged.

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Sun 14 Apr 2024 12:09
Motor Finance - probe - Terry W

These "scandals" are driven by greed and stupidity.

Car and insurance (PPI) sales are driven by greed - we all are as a well padded wallet is nice to have. Legislate against one scam and another will soon emerge.

Many of the public are stupid or naïve. They are happy to get what sounds like a good (too good to be true) deal.

They are happy to climb on the compensation bandwagon as it re-affirms their paranoia - unfairly exploited - and re-pads their wallet.

The lawyers are very happy to feed the paranoia - expensive litigation can run for years.

Ultimately society pays - that includes me and I resent being held liable for the greed and stupidity of others. In this case I assume they were content with the monthly cost. Most will by now no longer even own the car.

As a society we empower all to exercise their rights. With freedom comes responsibility - feeding a dependency culture and compensating stupidity and greed is unacceptable.

Before being allowed to sign up to financial agreements, folk should have to pass a competence test. I have no doubt that this would be seen as a denial of personal liberty - but protection from their own inadequacy in financial affairs is better than compensation after the event.

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Sun 14 Apr 2024 12:34
Motor Finance - probe - Bromptonaut

I've not yet read enough about this to understand the problem. On the face of it if you were happy with the monthly payment then 'where's the beef'. On the other hand if something was concealed....

PPI was a genuine scandal. It was, in the vast majority of cases, valueless; even if you needed to claim exclusions would stop payment.

I got caught by it once or twice but then realised that as I had a secure job and very good occupational sick pay I'd no need.

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Sun 14 Apr 2024 13:24
Motor Finance - probe - daveyjp
“if you were happy with the monthly payment “

And there lies the problem. I want to know the price before even discussing how the car will be paid for.

I read a post of X yesterday where a main dealer wouldn’t tell a buyer the price of the car! All they wanted to sell was a finance package at £x a month.
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Sun 14 Apr 2024 13:48
Motor Finance - probe - Maxime.

We had the same problem a couple of years back buying the Kia.

In the end hubyy said if you want to sell us a car sell it. we are cash buyers. otherwise we'll go elsewhere. "we have to tell you the options" "We don't want them."

We got the boss after a while and said the same as above. sell it or we'll go.

"It is company policy to offer choices! "

"we have made our choice, shut up and sell it and stop trying to sell finance, paint protection etc.... oh, ok bye..."

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Sun 14 Apr 2024 18:50
Motor Finance - probe - Engineer Andy
“if you were happy with the monthly payment “ And there lies the problem. I want to know the price before even discussing how the car will be paid for. I read a post of X yesterday where a main dealer wouldn’t tell a buyer the price of the car! All they wanted to sell was a finance package at £x a month.

That's where most of their profit is made from - selling finance, not cars. As I've indicated earlier, when the inevitable housing crash comes, that combined with the other strands of loan defaulting because of an looming economic crash, will make all previous ones - including the one from the late 1920s - look like peanuts in comparison.

The amount of public and private debt being held off-book and/or in 'creative ways' will sooner rather than later have to be reckoned with. Probably why the powers that be have recently been, in my view, creating so many events as 'excuses' to distract us all from what they've been doing behind the scenes on the financial front, whilst at the same time tightening their control on what we can find out.

Unfortunately more and more people are wising up to those actions despite their best efforts, making TPTB more desperate, meaning either the great reckoning will be sooner or something 'very very bad' will be their only option left...

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Sun 14 Apr 2024 20:20
Motor Finance - probe - Orb>>

Unfortunately more and more people are wising up to those actions despite their best efforts, making TPTB more desperate, meaning either the great reckoning will be sooner or something 'very very bad' will be their only option left...

Well and truly wised up Andy, and escape routes ready.. at the earliest signs.

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Sun 14 Apr 2024 22:30
Motor Finance - probe - Big John

That's where most of their profit is made from - selling finance, not cars.

I've tended to avoid car finance for decades. I was made redundant for a while over 30 years ago and car finance made things "interesting" to say the least and until recently I'd been doing a highish mileage commute for years. I decided to avoid finance and save up instead and buy cheaper - usually a year old end of model car and keep for a decade. Three decades later I can say the plan worked although I had to use our old ancient Polo for a while to pump prime the savings process.

One thing that works against me these days is it's hard to buy outright as many discounts are based on finance deposit contributions - I'm amazed that's legal really!

At least I can't be made redundant from being retired now.

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Sun 14 Apr 2024 15:19
Motor Finance - probe - Andrew-T

They couldn't care less whether you can afford it.

But I'm sure they would prefer it if you could ?

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Sun 14 Apr 2024 15:51
Motor Finance - probe - Adampr

They couldn't care less whether you can afford it.

But I'm sure they would prefer it if you could ?

Why? It's absolutely meaningless to the person doing the selling. They just want their little bit of commission.

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