Car financing crackdown 'to save drivers £165m'

wings

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Surely if a business is loaning you money they get to determine what that interest should be? and it's up to you whether you accept or not? or have I misread that?
 

Nickyyy

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Yes but dealers are rarely lenders. They are brokers who have access to a few different lenders from the way I read it and the commission is such that they are incentivised to try and sell the higher rates.
 

bill

Banned
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Yeah the dealer that gave us the 0% interest told us they even made £50 on the loan that worried me thinking is there some hidden charge at the end or if we pay it of early.
This will effect the industry because that is one of the ways they make money on new car sales.
 

Nicky Glanza

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I have only ever financed one car and its now paid off and rates etc where set by Blackhorse,

but I do remember when the mate went in to buy a golf r off C.H. and the payments were around 50 quid over his budget and they adjusted finance and gave him a flat rate??.. which brought the payment down to his budgeted price? is that something along the lines of what is occurring above?
 

da.murf

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yup a dealer often will be able to adjust the rate instantly by physically typing in a lower rate in the finance calculator that is supplied by the lender.

for example my rate when I bought my used x1 from bmw was much much lower than most customers where ever offered.

the higher the rate the more commission. the only reason a dealer would adjust the rate (ie make it lower) was to lower the monthly payments without the customer needing to add extra ££ to the deal or the dealer having to discount the car further. (usually was the last resort if the dealer had discounted car, and the buyer only had say 1000 deposit from a px etc)
 

veedubnoodle

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Someone correct me if I'm wrong but I thought the dealers didn't get the commission paid out until the end of the finance agreement?
 

da.murf

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Someone correct me if I'm wrong but I thought the dealers didn't get the commission paid out until the end of the finance agreement?
Think it was within first few weeks of agreement. That’s why dealer frowned upon a buyer taking finance to get the deposit contribution etc then clearing finance next day with savings etc
 

JamieG95

RMS Photographer
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It will be interesting to see how this goes, If banned I think the actual "cash" prices of cars will rise. There's a lot of dealers out there selling cars effectively at cost price but at 15/16% APR making all their margins via finance.

Someone correct me if I'm wrong but I thought the dealers didn't get the commission paid out until the end of the finance agreement?

It will be paid at the beginning of the agreement, but if the agreement is cancelled it's then clawed back from the dealer.
 
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