Surely when you enter any agreement you are given all the figures and costs, pages and pages of small print, which I know nobody really reads, and after agreeing to it all the agreement is signed, stating you are happy with everything on offer. Perhaps an unpopular view, but if you disagree with any contract, don't sign and agree to it, they are (at least used to be) binding. The employment world would be interesting if you could retrospectively throw part of an employment contract out years later because a bloke on the tv, who had made a fortune out of this, said you can. But just my opinion, I'm no expert.
While I don’t disagree with you, I think the key word is “hidden” and so the contract did not contain all relevant detail and the hidden elements, if made plain, may have stopped someone from signing. Now, no matter how unlikely it is that someone would have scrutinised the contract to that degree, I guess that by hiding these details they left themselves open to this kind of claim against them. They should be up front and honest if they believe that they are not doing anything that might be seen as questionable. The fact that they chose to hide it suggests that it was questionable so they brought this on themselves. I’d suggest that they are victims of their own greed. Disclaimer - this is pure opinion that is not supported by any knowledge of finance agreements.
I’m kind of with you. The issue here is more that they could offer lower rates but don’t as they got more commission. This was outlawed a few years ago, 2014 maybe??! Hence 2007 on seems to be the trigger as it’s 7 yrs before that date. I’m waiting for the GAP insurance scandal to hit….
I think that in addition to you very valid points above, as the dealer has spent the last hour or so extracting all your financial information as part of the application, it could be argued that they were then using this to set the interest rate on the basis of ability to pay.
This case is that they weren’t and the lender can only do that, not the dealer. The fact is they would get more commission for, say, 9% than 3% so even though you may meet the criteria, and the lender offers rates from 3%, they tell you the deal is 9%. Not sure who they think will bail out the banks again (I wonder) when they collapse from another multi billion pound automatic repayment that the regulator will insist on
Right, so the sales guy could give the customer 3%, but having seen his/her finances knows that they could afford 9%. If the customer accepts, the sales guy gets a bigger commision. The sales guy won't try to get a customer with less income on a 9% because he knows this might make the customer walk away. So my point is the sales people are using your application information to screw you, so they get a big backhander -oops I meant commision...
I think there were at least a couple of issues with the practice; a) it was often a flat rate of interest added on top of a lenders APR and that was not made clear - i.e. agreements mentioned APR but the actual rate added was charged as a flat rate, and b) allowing sales to arbitrarily charge what they wanted is considered unfair practice especially as the additional charges were not clear - customers thought the interest charged was down to the lender not a salesmans commission - which makes life easier for the sales team as a customer couldn't negotiate aganst what they thought were lenders APR rates. Or something like that... :-|
The sales people are often very well practised, incentivised and skilled. They have all kinds of tactics from demo rides to above market trade in price, lower than expected monthly payments, balloon payments, interest rates, admin fee, deposit, contract duration and typically just when you are getting it straight in your mind they sell you the add on GAP/ wheel protection/ extended warranty which can add another thousand(s). Part of me wants to say if the bike/car is not "bent" stolen etc and they're not saying one interest rate but writing another as adults we need to accept the results of our own decisions. Which is why at the end of the negotiation in the dealership, none of the individual numbers they quote in their sing song, warm, reassuring, smiley way are important. A buyer needs to work out what is precisely the total cost to change. If you arrive with Mutley and leave with Hyper how much of you hard earned is it going to cost. The answer is very likely to be too much.
From what I’ve read, of the two cases adjudicated by the FCA that resulted in ordering the finance providers to refund the difference between the percentage rate paid by the customer and the lowest percentage rate available from the lender, as a result of allowing discretionary commission rates to fund commission, one was financed by Blackhorse Finance (aka Lloyds Bank). Guess who underwrites Ducati PCP ? That would be Blackhorse Finance. Simple question, was the interest rate in your finance agreement with the vehicle seller, the lowest available from the lender used. If not and the higher interest rate was used to fund the salesman’s commission, you should get the difference between the two interest rates charged refunded. It would appear the timing of Ducati first offering PCP in 2012, coincided with Ducati Holdings being bought by VAG. Andy
Taking banking and finance companies money seems fair game to me. They have been and still do, take the piss when it comes to lending. I am astonished that energy compnies have not been held to book for not offering the lowest charge rate to its customers.
Hmmm... wrt borrowing I think it's pretty hard for most people to take that position without some family support... who probably 'borrowed' previously...
Yes it's hard, you live frugally, save until you have enough to make the purchase (by which time you've had a rethink about just how important said purchase really is to you).
