[olduser]

Found on the BBC;

https://www.bbc.co.uk/news/articles/c9qy7wy4ey1o

Is the court ruling correct, has any vendor a duty of care to the customer where the customer has to rely on the vendors knowledge?
Or should the customers have arranged the finance themselves?
Or has there been some sort of pressure applied otherwise the finance industry stood to be wiped out under the original ruling?

[Drivingforfun]

Every salesperson has polar opposite interests to their every buyer, that's the nature of the relationship... I know this is about creating a conflict of interest when arranging finance on a car that is presumed to be already sold: convincing the customer to straight-up pay a higher price would be fine, but doing it this way could be seen as deceitful

Albeit the customer would have to be quite ignorant... I don't really get why people are so happy signing finance deals. It doesn't help that to help people enhance their financial position (i.e. give financial or investment advice) you have to be accredited but you can get someone to sign a crippling finance deal with almost no training or qualifications

[Beelzebub]

Originally Posted by olduser

Found on the BBC;

https://www.bbc.co.uk/news/articles/c9qy7wy4ey1o

Is the court ruling correct,

Doesn't matter, it's final!

FWIW I think it is right. I can't see how knowing the amount of commission the dealer earns would affect a customer's buying decision.

He knows the rate he will pay. How that is divided between dealer and finance company makes no difference to him.

[Santa]

It's the same with mortgages. Most people are only interested in the monthly payment, not the true cost,

They see a car on a forecourt and the salesman says that they can put £100 down and pay £x a month for five years. They think that they can afford that, and the fact that it will cost twice the "sticker" price passes them by.

[olduser]

Originally Posted by Beelzebub

Doesn't matter, it's final!

FWIW I think it is right. I can't see how knowing the amount of commission the dealer earns would affect a customer's buying decision.

He knows the rate he will pay. How that is divided between dealer and finance company makes no difference to him.

I can see that selling the car, under present law is like any other sale and is loosely covered by 'buyer beware' .

When it comes to the finance, the dealer has now become an adviser, as such he has a duty to give the best advise.
If the dealer advises the customer to sign with finance company X at an interest rate of Y which is the maximum, and the total cost will be Z, because I (the dealer) get the highest commission and adds the best interest rate is with company A who would offer you an interest rate of B at a total cost of C that would be fine and legal.

What the first judge ruled was the dealers had not done that, they, in their advisory role, had offered only one finance agreement, the one paying the dealer the highest commission and the finance companies were complicit in this deception by offering the dealers a high commission to do this.

The odd thing is, the High court ruling appears to be saying, (I have only seen part on TV) in the individual case they considered, all the rules had been broken and that individual was entitled to their money back with interest* but for all of the other claimants the dealings had been legal?

Rip of Britain comes to mind.

*Because the dealer had not explained the finance offered at the highest interest which would erne him (the dealer) the highest commission.

[Santa]

I am constantly surprised by the foolish things people do and the general ignorance about how things work, especially with how easy it is to get information on websites like moneysavingexpert, etc.

If the guy selling you a car offers a "deal" with 14% interest, surely you would know that cheaper loans are available. If your credit history is bad, then maybe 14% is reasonable, especially compared to the near 30% the credit card companies charge.

I once read that finance companies like loans secured by cars because they are easy to snatch back if the loan goes sour.

[Rolebama]

I worked at motorcycle and car dealerships for a few years. All the customers wanted to know was how much deposit and monthly payments. I sold a few motorcycles over the years, and nobody ever questioned the interest rate, or what finance company we used. (One place I worked had their own in-house finance company, so a double whammy on every financed sale.) If ever I brought up the subject, customers would wave it off, because 'it was over their heads'. All they wanted was who to make out the Standing Order to.

[olduser]

Originally Posted by Santa

I am constantly surprised by the foolish things people do and the general ignorance about how things work, especially with how easy it is to get information on websites like moneysavingexpert, etc.

If the guy selling you a car offers a "deal" with 14% interest, surely you would know that cheaper loans are available. If your credit history is bad, then maybe 14% is reasonable, especially compared to the near 30% the credit card companies charge.

I once read that finance companies like loans secured by cars because they are easy to snatch back if the loan goes sour.

Unfortunately, kids are never taught this sort of thing at school, credit is never free but then if they were taught the UK economy would probably grind to a halt.

I am afraid I am so old, I was brought up to believe 'if you can't pay for it you can't have it'.
Mortgages, Higher purchase, Leasing, Credit Cards all made higher prices possible.

I found, when helping people sort out energy bills that were wrong, they had no idea of how to workout what they had used, how much that would cost, and what it would cost if they paid with their credit card, they had so much stuff on direct debit they had no idea how much cash they had.

[olduser]

Originally Posted by Rolebama

I worked at motorcycle and car dealerships for a few years. All the customers wanted to know was how much deposit and monthly payments. I sold a few motorcycles over the years, and nobody ever questioned the interest rate, or what finance company we used. (One place I worked had their own in-house finance company, so a double whammy on every financed sale.) If ever I brought up the subject, customers would wave it off, because 'it was over their heads'. All they wanted was who to make out the Standing Order to.

Lambs to slaughter comes to mind.

[Santa]

@olduser

How many of us really know what our cars are costing us? If you calculate it properly with all the costs, including depreciation and the interest on the loan. Never mind the lost opportunity cost of not investing the money; it can be quite scary.

[NMNeil]

Originally Posted by Santa

I once read that finance companies like loans secured by cars because they are easy to snatch back if the loan goes sour.

I worked with someone who was underwater with their car, that is he owed more than it was worth.
So his genius idea, which is not uncommon, was to just let the finance company repo his car, and they did.
He couldn't understand why he was still getting demand letters from the finance company, so I sat down and explained to him something that he should have been taught already.
You buy a car on finance and the car title is held as security, that is, there's a lien on the title that has to be cleared before it can be sold again. If the finance repos the car you still owe them the money which you promised to pay them according to the legally binding finance agreement you signed. Yes, they will sell your car they repoed at auction and that small amount of money they got from the sale will be deducted from the total amount you owe, but you still owe them the rest, and they will collect.
My local credit union even has cars you can make an offer on that they have financed and repoed because they know they will only get pennies on the dollar at auction.
https://www.oterofcu.org/loans/repossessed-vehicles/

[Rolebama]

Re my post above, the company would get first offer from repos, and they definitely got them cheap. Then it was a quick valet, and back in the showroom at full price. That particular company had a very food local reputation, and the turnover was very quick. So the profit just kept rolling in.
FWIW: The company folded when the owner passed. His son inherited the company and all assets and cash. He was an idle so-and-so, so he just sold everything and blew the money on the proverbial wine, women and song.