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Car Finance Mis-selling
Dippenhall
Posts: 3,932
Just seen the Martin Lewis campaign where hidden commission taken by dealers on past PCPs and car finance deals must now be disclosed and any paid can be claimed back. Now illegal, but historically the finance company quoted a rate of interest to the dealer it wanted to earn on the finance, say 4%, but the dealer could hike that up to whatever it wanted, say 6%, and the finance company rebates the additional interest to the dealer. It's the secrecy and hidden nature of the arrangement which is the offence. Still happens but it must be disclosed and agreed to.
For years was the normal system in all commission based savings and pensions financial products where the intermediary decided what the provider would charge and how much of that would be a back hander siphoned off secretly to the intermediary.
For years was the normal system in all commission based savings and pensions financial products where the intermediary decided what the provider would charge and how much of that would be a back hander siphoned off secretly to the intermediary.
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Is there a link available for a DIY claim?0
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Siv_in_Norfolk said:Is there a link available for a DIY claim?
https://www.diy.com/customer-support/complaints
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Think they went bust, but heard some horror stories about Car Craft in relation to this.
They would offer finance with say 10% interest and tell customers that a deposit would more or less assure it. People would put a few hundred down, be left waiting for an hour and then told that the best deal they could get was something like 30% interest with huge repayments. They would then say I can't afford that, refund my deposit, only to be told that in the small print it states deposits are non refundable.
People with poor credit was their target market, so it was almost a given that they couldn't afford the higher repayments.
Disgraceful practice.1 -
Millions of drivers who were mis-sold car finance to receive £829 average payout
Millions of drivers who were mis-sold car finance agreements should receive compensation this year, under plans by the regulator.
The Financial Conduct Authority's (FCA's) final plans should see most of the remainder by the end of 2027. After tightening criteria following consultation, some 12 million agreements will be considered unfair and due compensation. Payouts will average £829, bringing the total cost to lenders to £9.1bn.
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I believe I have 3 loans that fall into the time period in question. As I can't remember who the 3 loans were actually with (a Jag, a Honda & a Merc) last year I started an online claim via a Claims Management Company. This was put on hold late last year due to the FCA/Court ruling and after they came out with guidance on what to do I have decided to wait & see if any loan companies would get in touch. I remember a Martin Lewis programme where he had the FCA giving "advice" on what to do & they said that the loan companies should be doing all that they could to get in touch with potential claimants (I have moved 6 times since 2007) and maybe will use the DVLA to get up-to-date addresses.
I must be getting 3 text a week from claims companies asking if I want their "help" - but seeing as they will take around 30% of any redress then I think I'll wait it out - if not I'll fill in the forms and go from there.1 -
Yes here - diy_claims.comSiv_in_Norfolk said:Is there a link available for a DIY claim?1 -
I tend to put all of my trust in claims management companies that advertise above urinals at motorway service stations.0
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I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.0 -
Will you take £500, cash?gringo said:I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.0 -
I fully understand your point but surely GAP insurance is a must.gringo said:I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.Do you just mean you were selling a more expensive variant of this insurance?0 -
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I personally was always dubious, and it was sold to us more "as a nice little earner", but I don't think any one really thought it essential. It always struck me as a product that wasn't need driven, but more as just another opportunity to earn additional bunce- like Key, tyre, and bodywork scratch insurance. A lot of customers tend to eventually buy something extra if you wear them down enough as they can't keep saying no.valleynick66 said:
I fully understand your point but surely GAP insurance is a must.gringo said:I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.Do you just mean you were selling a more expensive variant of this insurance?
That the insurance companies sales people had to really push it, and sell it to the car sales staff who were always a naturally sceptical breed (but money driven) and the dealership management had to insist you sold it or be punished - then I question its true worth. I understand that it's cheaper now after the Govt intervened to reduce commission levels but I have never bought it. The last time I bought a car the salesman tried to sell it, but when I told him that I also used to work in car sales he just said "oh! so you know about it" and gave up! and didn't persist to push the other products "I have to mention them".0 -
I’ve always understood that it is a genuine product ie bridges any shortfall in your regular car insurance which is linked to prevailing car values versus what ‘debt’ you may have on your PCP / Lease.gringo said:
never thought it was essential, and it was always sold to us "as a nice little earner", but no-one really thought it was needed. It’s cheaper now after the Govt intervened.valleynick66 said:
I fully understand your point but surely GAP insurance is a must.gringo said:I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.Do you just mean you were selling a more expensive variant of this insurance?0 -
If its good for your peace of mind then its worth it.valleynick66 said:
I’ve always understood that it is a genuine product ie bridges any shortfall in your regular car insurance which is linked to prevailing car values versus what ‘debt’ you may have on your PCP / Lease.gringo said:
never thought it was essential, and it was always sold to us "as a nice little earner", but no-one really thought it was needed. It’s cheaper now after the Govt intervened.valleynick66 said:
I fully understand your point but surely GAP insurance is a must.gringo said:I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.Do you just mean you were selling a more expensive variant of this insurance?0 -
Spoken like a true salesman.gringo said:
If its good for your peace of mind then its worth it.valleynick66 said:
I’ve always understood that it is a genuine product ie bridges any shortfall in your regular car insurance which is linked to prevailing car values versus what ‘debt’ you may have on your PCP / Lease.gringo said:
never thought it was essential, and it was always sold to us "as a nice little earner", but no-one really thought it was needed. It’s cheaper now after the Govt intervened.valleynick66 said:
I fully understand your point but surely GAP insurance is a must.gringo said:I was a car salesman, and was required to offer finance. Essentially you had a base % of interest (say 9%) and had to charge a minimum rate in order for the dealership to earn (say 10.5%), you were then targeted to earn extra commission on whatever interest rate you could get away with (say 14.5%). It was essential to avoid mentioning rates until you were legally obliged to, but instead geared everything to getting the customer to say how much the maximum payment was they would be happy to pay. You then adjust the rate so that you got the maximum commission whilst coming in (if you could) at just under the monthly payment target. Alternatively you could extend the term or increase the deposit. I was never happy doing this, hence why I'm no longer a car salesman, and would regularly get bollocked for not getting the higher rates (plus all the other con add-ons like GAP insurance, Key insurance etc).
Whilst I hate these "ambulance chaser" firms, I am glad that these dealership practices have been highlighted and stopped.Do you just mean you were selling a more expensive variant of this insurance?2
