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?