Honda stops car finance.

[TrueSpirit]

Wa supposed to say "best deal for the customer".....not company. Thats what cones if posting when watching TV!. As for those saying about shady practises and lack of regulation....really??? We are heavily regulated by the FCA, we get spot checks we all have to be qualified and I have to take 2 exams a year... which are not easy....no pass means no selling finance until you do. The exams have changed a lot in the near 40 years on and off I've done them....it was all about compliance and making sure the paper work was 100 percent...now there is hardly any of that...being online you can't really go wrong...now it's all about your responsibility to the customer...because like everything else no one is responsible for their own actions anymore. I have to check that they are mentally capable of making the decision, whether they are being coerced into talking out finance for someone else, do an online check to make sure they are likely to be able to afford it. If someone takes out a loan they can't afford imo that's their own stupid fault... but not in the eyes of the FCA. The last thing we need is anymore regulation thanks.

Just for clarity, what do these training courses cover. For example, do they cover the FCA regs on being a credit broker in a financing deal.
If they do, do these training courses make clear that credit brokers owe a fiduciary duty to their customers. And specifically commissions that the broker will earn on a financing package. If the broker only uses one lender or only a few potential lenders, it is good practice to disclose this fact and that the customer could potentially get a better deal if the customer casts their net wider. or that the broker has multiple products at their disposal, the reason this one was selected. And the fact that other options could be looked into that may have got a better deal for the customer. If the broker is merely selecting a product that pays out the most commission without regard for the customer's needs , I dont think this is proper.

 

[ALFAitalia]

I think most customers know that......low rate loans are advertised everywhere.....even when you go shopping Tesco, Sainsburys and M&S advertise loans through their banking sectors and lower rates than I can offer.....don't forget that these days I cant alter the rate one one bit...... people just use us for the convenience even if they know my rate is slightly higher.....most don't worry about the few quid a month difference it will make in the real world....they like the simplicity of keeping it all in house under one roof. We do NOT have multiple products at our disposal. I didn't when I was selling cars either......just one company....in my case Blackhorse..and just two products....HP or PCP. PCP is over 80% of car sales......but largely ignored by customers in the leisure industry,....which is odd. Might be to do with the higher average customer age.
As far a s training goes it covers everything including those bit you mention. The paperwork tells the customer that the dealer MAY receive commission which i draw their attention too when proposing the deall....so way before sign up which is usually on collection day. (we don't always if there is a low rate offer on....just a few quid to us for doing the paperwork).....but as it stands I only need to tell them how much of they ask.....and some do in which case I usually show them the deal acceptance sheet which clearly shows the amount which most find accetable.....as they realise we a business and not a charity!!! That may change now of course.....but that does not worry me as all dealers are going to be quoting roughly the same commission figures......

 

[TrueSpirit]

My view (head of compliance for a business regulated in multiple jurisdictions) is the paperwork should ideally disclose the actual commission earned by the broker on the current finance package. Also given only one finance provider is being used by a broker (it should be clear to the car buyer that shopping around could result in them getting a better deal and if the broker has such a narrow list of credit providers , then they shouldn't really be aggrieved if they don't earn any commission because quite frankly they've not done much to earn any commission ) car finance shouldn't be that much different to mortgage finance IMO.


Typically what sort of commission levels are we talking per finance deal, Alfa?

 

[ALFAitalia]

I don't agree with that.... you don't know how much your bank is making from your money and that's a much bigger sum... and you don't know how much the actual finance house is making.... again a much bigger sum than the dealer makes......so why should you know how much your dealer makes?
Why stop there?.. why not make the dealer tell you exactly how much money they are making on the car or caravan itself. I'll tell you why... because it's none of your business. All the customer should care about is that they are happy with the car deal and happy with the rate....and if not they hunt around for a better deal until they are happy. It's not as if what the dealer makes affects their interest rate these days...it did once but no longer. What next?...your local supermarket putting up signs telling you how much percent profit they make on your beans and carrots?.... cuz let me tell you as a percentage it's much bigger than your dealer or finance house makes and think how much you spend there over three to five years of the average car finance deal. The world's going soft.

In answer to your last question it depends on the amount borrowed and the period....but even on a big amount over a ten year deal.... ten year deals can be done on new caravan but not cars..... the dealer commission is 100s.... not the 1000s that customers imagine. Thousands was a possibility before commission caps, finance house decided and fixed rates and PCP sales (no longer allowed).....but that was stopped years ago.... without checking it must be at least ten years by now.

 

[sgregory124]

Why stop there?.. why not make the dealer tell you exactly how much money they are making on the car or caravan itself. I'll tell you why... because it's none of your business. All the customer should care about is that they are happy with the car deal

What you're saying would be absolutely fine - IF it wasn't for the fact that a huge number of car dealers and finance houses hadn't been historically ripping people off (and still doing it). I have absolutely no problem with people making money, but making money saying one thing to the customer and then doing another, that I have a big problem with.

The kind of figures we're talking about here are not something the average consumer takes lightly and neither should the dealer/finance company during the sale. I really don't see what your issue is with firms being transparent? What have they got to hide?

 

[ALFAitalia]

I think you are in the past a bit. Nowadays dealers have strict rules to stick to, no variance on the rates and strong punishments if they do wrong. Gullible people will always be ripped off...but I'm afraid if they are too stupid to check or compare prices of finance, things or services they buy no amount of legislation will protect then. Meanwhile us dealers suffer the excess paperwork and conformity. If someone stitches themselves to a deal with monthly payments that they can't really afford that should be their fault... and if they realise then they sell the car and buy something cheaper that they can afford the monthlies on. But no...it must have been the dealers fault as he did not do a good enough job when he checked out my "ability to pay"...so its his fault so the deal is void and his problem to sort. As usual...laws to protect the stupid that affect the rest of us.

 

[BIGDOG]

I think you are in the past a bit. Nowadays dealers have strict rules to stick to, no variance on the rates and strong punishments if they do wrong. Gullible people will always be ripped off...but I'm afraid if they are too stupid to check or compare prices of finance, things or services they buy no amount of legislation will protect then. Meanwhile us dealers suffer the excess paperwork and conformity. If someone stitches themselves to a deal with monthly payments that they can't really afford that should be their fault... and if they realise then they sell the car and buy something cheaper that they can afford the monthlies on. But no...it must have been the dealers fault as he did not do a good enough job when he checked out my "ability to pay"...so its his fault so the deal is void and his problem to sort. As usual...laws to protect the stupid that affect the rest of us.

Did you say that you arrange 10 year finance for your caravans?

 

[sgregory124]

I think you are in the past a bit. Nowadays dealers have strict rules to stick to, no variance on the rates and strong punishments if they do wrong. Gullible people will always be ripped off...but I'm afraid if they are too stupid to check or compare prices of finance, things or services they buy no amount of legislation will protect then. Meanwhile us dealers suffer the excess paperwork and conformity. If someone stitches themselves to a deal with monthly payments that they can't really afford that should be their fault... and if they realise then they sell the car and buy something cheaper that they can afford the monthlies on. But no...it must have been the dealers fault as he did not do a good enough job when he checked out my "ability to pay"...so its his fault so the deal is void and his problem to sort. As usual...laws to protect the stupid that affect the rest of us.

Sure, there will always be people who are incapable of managing their own personal finances and saddle themselves with an unaffordable purchase - I accept that.

What I won't accept is being told by a dealer that my interest rate is 'X', I agree to it and am happy with the monthly payments. But only to find out later (11 and 7 years for my two agreements respectively in my case) that said dealer told me it was interest when in actual fact, some of that interest is a bump in the salesman's commission.

That is whats wrong here, you can't just inflate the interest, lie to the consumer and then inflate your commission accordingly - that's just plain wrong.

 

[BIGDOG]

I think you are in the past a bit. Nowadays dealers have strict rules to stick to, no variance on the rates and strong punishments if they do wrong. Gullible people will always be ripped off...but I'm afraid if they are too stupid to check or compare prices of finance, things or services they buy no amount of legislation will protect then. Meanwhile us dealers suffer the excess paperwork and conformity. If someone stitches themselves to a deal with monthly payments that they can't really afford that should be their fault... and if they realise then they sell the car and buy something cheaper that they can afford the monthlies on. But no...it must have been the dealers fault as he did not do a good enough job when he checked out my "ability to pay"...so its his fault so the deal is void and his problem to sort. As usual...laws to protect the stupid that affect the rest of us.

Would it be possible for you to step back from the finance part of the job?
I don’t think that you have a future in financial services, when the FCA get properly stuck in your views on treating customers fairly will be very much out of alignment with the industry.

 

[ALFAitalia]

Sure, there will always be people who are incapable of managing their own personal finances and saddle themselves with an unaffordable purchase - I accept that.

What I won't accept is being told by a dealer that my interest rate is 'X', I agree to it and am happy with the monthly payments. But only to find out later (11 and 7 years for my two agreements respectively in my case) that said dealer told me it was interest when in actual fact, some of that interest is a bump in the salesman's commission.

That is whats wrong here, you can't just inflate the interest, lie to the consumer and then inflate your commission accordingly - that's just plain wrong.

Correct.....and you cant do that now nor have you for several years.

 

[ALFAitalia]

Did you say that you arrange 10 year finance for your caravans?

Yes.....120 months for new vans....but 84 months is the limit on used ones. Subject to status. Terms and conditions apply!

 

[ALFAitalia]

Would it be possible for you to step back from the finance part of the job?
I don’t think that you have a future in financial services, when the FCA get properly stuck in your views on treating customers fairly will be very much out of alignment with the industry.

LOL.....I've been selling finance for nearly 40 years.......I'm pretty good at it and NEVER been picked up for any form of misconduct.....most salesmen get a ticking off from the FCA at some point. We never had a single PPI mis selling case land at out feet either.....cus we did it properly.....but Id be lying if I said that I did not miss the PPI commission though!!! There is a big difference between my own personal views and how I act and behave at work....where I stick 100% to the rules and am fully qualified......not that I have a choice!
They know my views.....I'm quite happy to speak them out loud when on courses. Cant see the point of a course/seminar where you cant put opposing views across. Views and actions are different things. Many their including course holders agree. But you have to base these rules on the lowest common denominator and protect the company finance house from ever increasing legal threats from those that don't feel responsible for anything they do and want to know the ins and out of everything.....which is of course why this thread started.

 

[E55BOF]

...Gullible people will always be ripped off...but I'm afraid if they are too stupid to check or compare prices of finance, things or services they buy no amount of legislation will protect them......it must have been the dealers fault as he did not do a good enough job when he checked out my "ability to pay"...so its his fault so the deal is void and his problem to sort. As usual...laws to protect the stupid that affect the rest of us.

That's more than ever the way the legal system in the UK (and quite possibly the rest of the developed world) seems to be moving. Of course there are those who do need to be protected from their own greed, stupidity and naivety, but it often seems as though the eventual objective is to ensure no private individual is ever, under any circumstances whatsoever, even slightly responsible for anything untoward that happens to them., and should receive 'compo' for anything that does.

"Where there's blame, there's a claim" - the mantra, spoken or unspoken, of the ambulance-chasing lawyer - has come to mean "We'll do our damnedest to find blame even where there is none". Anybody too dim to realise that climbing a ladder entails a risk of falling off it and hurting themselves should not be allowed out unsupervised, let alone allowed to buy or own a ladder.

Whatever happened to common sense? The man on the Clapham omnibus has been revolving in his grave for a good few years now...

 

[SpikyMikey]

That's more than ever the way the legal system in the UK (and quite possibly the rest of the developed world) seems to be moving. Of course there are those who do need to be protected from their own greed, stupidity and naivety, but it often seems as though the eventual objective is to ensure no private individual is ever, under any circumstances whatsoever, even slightly responsible for anything untoward that happens to them., and should receive 'compo' for anything that does.

"Where there's blame, there's a claim" - the mantra, spoken or unspoken, of the ambulance-chasing lawyer - has come to mean "We'll do our damnedest to find blame even where there is none". Anybody too dim to realise that climbing a ladder entails a risk of falling off it and hurting themselves should not be allowed out unsupervised, let alone allowed to buy or own a ladder.

Whatever happened to common sense? The man on the Clapham omnibus has been revolving in his grave for a good few years now...

The "Caution, contents may be hot"warning on the MacycD's coffee cups comes to mind

 

[E55BOF]

The "Caution, contents may be hot"warning on the MacycD's coffee cups comes to mind

Apparently the similar warning on their hot apple pie should read should read "Caution, Versuvius Inside"...

 

[ALFAitalia]

LOL...on my Maccy D apple pie it said that the contents "MAY be hot".......it bloody well better be!!!

 

[ALFAitalia]

Back on the topic of this thread....nothing on Honda's finance website page says anything other than business as usual.

 

[SpikyMikey]

Apparently the similar warning on their hot apple pie should read should read "Caution, Versuvius Inside"...

"warning - may contain apple"

 

[TrueSpirit]

I dont really think most salesmen get picked up by the FCA, thats clearly not possible. Not aiming this at you directly Alfa (as you know what you're doing ) but just because a business hasnt been caught doesn't mean they are clean. It's unrealistic to think the FCA investigates every registered business, far from it. I think you can only gain some confidence of a claim of a clean bill of health if the FCA has investigated your business and had no findings or if you get a mock audit from various advisory firms that come in and audit your processes and records or other internal audit process etc.

As others have mentioned above and I'll reiterate , if your role is as a broker or intermediary in a transaction etc and you are earning a fee , it is fair and proper that your commission as part of a finance transaction is communicated in an open and transparent manner. If you are carrying out activities that are regulated then that's just how it is. You can argue the merits of having all sorts of laws eg AML laws but given they are here and FCA rules are specifically set out to protect customers.
You can't compare this to the margin on selling a car. Just because your company is selling a car, you as a broker are arranging a finance transaction (which is a regulated activity ) and distinct from the car sale itself

 

[st13phil]

The "Caution, contents may be hot"warning on the MacycD's coffee cups comes to mind

This is an often-cited example of stupid warnings for stupid people, but the underlying reason for it is more complex and goes to the heart of why consumer protections are needed.

It all started when a woman spilt MaccyD's coffee in her lap. OK coffee is meant to be hot, but this was so hot that it cause her significant scald burns. So the question is "why was it so hot?".

It turned out that MaccyD had a company policy of serving their coffee at 95c or so, i.e. far too hot to drink at the point of service. So why did they do that? Simple: to stop people drinking it in the store and then claiming the advertised "free refills".