Paul C

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Everything posted by Paul C

  1. All the gory details are here: https://www.fca.org.uk/publication/multi-firm-reviews/our-work-on-motor-finance-final-findings.pdf Upon reading through, I think the situation is worse than a lot of people think it is. The franchise dealers were preparing for an upheaval this summer (then came along CV19) but if enough momentum builds in the claims management sector to go after them for historical issues then I believe we will see a bloodbath. Put simply, the timeline is something like this: 1. The financial regulators were historically quite weak 2. Banks and credit card providers took the piss and mis-sold PPI 3. A ruling was made, which the consumer groups won. (Then another related test case was also won). 4. The regulators liked the smell of victory and "got teeth" 5. Other areas of retail finance sat up and noticed; but car finance didn't 6. Car finance sector continued mis-selling on an industrial scale I believe another issue - one which CV19 will also 'break' - is the rather cosy relationship between CAP and the auction houses. Effectively they were trying to dampen down the volatility of used car prices, to reduce risk which the finance houses typically carried (because they're financing, and ultimately own, >80% of cars). In an otherwise balanced situation, if they can control supply then supply-demand means the prices stay up. Change demand by a significant amount (CV19, plus the part-collapse of PCP finance market) and their controls become ineffective. I believe we're heading for at least a partial- unravelling of the car finance sector, which is somewhat propping up the car industry.
  2. Apologies if what I post isn't 100% accurate - I need to look deeply into the details - but my understanding is there is, and always was, a requirement to inform the fact that commission is received (even if not asked), but not a requirement to reveal the amount of that commission. BUT the crucial factor is, if a motor dealer offers >1 finance offering, or a variable finance offering, they must indicate the best one from the perspective of the customer, not the best one from their £ commission. And it was possible to sell increasing DiC (difference in charges) or decreasing DiC finance, and earn more commission. Put simply, its to do with certain motor dealers being able to unfairly alter the split of money earned between the dealer-finance provider, at the expense of the customer, rather than the market able to function normally and set the cost of finance in a more appropriate fashion. Larger dealers (think.....big franchises) would act as price-setters, while small car dealers who offer someone else's finance are effectively price-takers. Somewhere will be a list of the "worst offenders" and I imagine the people who are on the list, know they're on the list. And we'll see over the next few months/years, a gradual increase in the amount of info in the public domain, as claims management firms etc gear up for this latest opportunity. They will apply because historically, when the PCP was sold we were either in the EU, or under the transitional arrangements which basically carried almost everything over for the interim. The rules at the time will always apply to historical agreements, can't make legislation which retrospectively makes something legal or illegal except in exceptional circumstances.....
  3. I saw it live. I appreciate your making forum aware of it (and James' journalism). My refined views on PCP is that for some, it is useful; but that its clearly not for everyone (and not for the 80% or so who have it). Beyond the specific findings and recommendations of the FCA, I am not sure if solicitors and claims management firms have enough to grip onto. After all, a misselling will be difficult to prove if someone in the past bought a car, used it then sold it, since cars depreciate (unlike insurance which wasn't claimable in the PPI scandal). Unlike PPI where the banks basically thought "this is fairly generic across pretty much all PPI sold", and thus they decided it wasn't worth contesting. It could be - depending on the details - a fairly narrow area of PCP which the finance houses certainly WILL fight on. One problem might be that car salespeople didn't fully understand the nuances of PCP and more likely missold something; unlike PPI where the bank call centre staff did understand the product better, but were directed from above to sell it (even though it was inapplicable most of the time). Obviously we need a fairly representative test case, and it go to court (then get appealed...then appealed, etc) to form a legal precedent.
  4. The prices are high because dealers opened again on 1st but auctions don't (fully) open until 15th. Its a temporary reduction in supply.
  5. Let's hope one of the other three enquiries comes good then.
  6. Full retail offering, at full retail price. If you have an amount of wiggle room you'd discount to for a loyal customer, then by all means apply that to the advertised/sticker price. I'd let your infinite sales charms smooth over the fact that its quite a bit different to the trade in price. https://en.wikipedia.org/wiki/Reassuringly_Expensive
  7. TBH Its hard to tell until the accounts come out and in particular what the fraud investigation report actually says. Its pretty obvious that if 1) there's a recession, 2) there is a big shift online, then the big posh showrooms are going to look very expensive for what they are and do. The CV19 health emergency is for sure going to cause an economic recession but it will be unusual and not like anything before (there's debate amongst the economists if it will be V shaped, U shaped or L shaped), this will accelerate what would have happened anyway. Some companies are in good shape and obviously the world will need cars and dealers. Probably less of them though.
  8. Thanks, I thought there was a further article I'd missed. That one was published yesterday, but I think if/when its added to, its date shows as when it was last modified (today), not when it was first created.
  9. Do you have a link to today's article please?
  10. I think its a bit early to predict reliably what June (and beyond) will look like, based on 3 days. True demand will be masked by any pent-up demand or fulfilment of delayed orders, etc. But the "starting up" of the supply of cars was always going to be problematical. And its not the same as before anyway, auctions are going to feel very different with social distancing requirements, a big shift to online (I reckon the auction houses prefer to do it online anyway) and new car supply issues being a factor too. There are a number of factors - such as the government actively discouraging public transport use; non-normal extension on PCPs, etc - for which there is no precedent. This period is distinctly different from any time before, including the 2009 financial crisis.
  11. I'll probably get shot down for it but DO YOUR OWN HPI CHECK. As in, the proper £20 job, not the £10 basic check, nor any other companies offering a similar thing but cheaper. In addition to the actual check, there's a guarantee that if the check doesn't reveal an anomoly (for example, log book finance owing which doesn't show up) they'll cover your loss. It will appear poor value for money on a cheap car - but these are the ones most likely to have something to find. And for an expensive car, you have more to lose. Also - might sound counterintuitive - don't dismiss a car with a "high" Auto Trader price marker. The reason is, dealers know how much their car is worth and with the internet age, it is very rare to find a dealer just adding a bit onto their cars in a hope. The high price marker will be for a reason, for example it has certain desirable (but not picked up by the price marker) options or colour; or its simply a great car which has led a trouble-free life. Obviously, its a handy feature for buyers but understand why it is what it is. This also applies to cars with a "low" marker - in the new normal of mostly doing the transaction online, it could very well be that the condition/bodywork is generally poor (it is very difficult to accurately gauge bodywork/paintwork condition over the internet, and very easy to choose not to photograph imperfections!)
  12. Only joking, they're good little cars - is this the one with the suicide rear doors?
  13. I hope you advised them, for their own safety and the longevity of the front tyres, to only cautiously use 1/4-1/3 throttle in the first few weeks of ownership as they become accustomed to the raw power of that 1.4 litre engine.
  14. They stopped checking for insurance about 5 years ago.
  15. Would be interesting if that resultant figure is lower than its trade in price!
  16. I have heard the government, or its ministers, say "car showrooms" about 100 times but at no point did they slip with the tongue, or paraphrase to say "car dealers". Car dealer != car showroom BUT....its pretty clear that the risk at an outdoor car sales pitch is less than an indoor car showroom environment, so based on the spirit/intention of the rules, it would not be an issue. Unless you're doing something very wrong or desperately cutting corners (and I think the vast majority of the public would be aware of this too, and not put themselves at risk).
  17. Das Welt Auto offers 30 day/1000 mile exchange (but not money back): https://www.volkswagen.co.uk/used-cars/approved-used-benefits . Audi is basically the same.
  18. There's loads of examples of others not adhering to the rules but its like everything else, you need to just let them get on with it. It will affect them, not you. But then....if it causes R to tip >1 and the 2nd lockdown happens.....hmmmm...... But then if we all observed perfect aseptic technique, R would swiftly drop to 0 and in about 3-4 weeks it would be history. The truth is somewhere in between!
  19. Something from the low end of the market - eBay and Facebook seller - would be very interesting at this time. The combination already-established remote selling and <£2000 price cars are both factors which will see an increase in demand in these current times, it would be interesting to hear how they deal with the issues etc. But a good one, someone who's been doing it for a number of years. The one that sticks in my mind I really enjoyed was when Rebecca interviewed Jamie Caple (Car Quay). He is a character, but also he's down to earth and relates strongly to car dealers. The big bosses of the big groups, inevitably, are a little "detached" from the front line so whilst they offer insight, its a different kind of information than eg a dealer who spends a lot of time interacting with the general public.
  20. Yep, agree. But if won't be quite yet, they'll wait until the time is right. I predict "shopping madness" on June 15th and they'll fear a second spike in cases etc. So, back end of the summer probably.
  21. The recent article suggesting a scrappage scheme for new and used, seems a little optimistic (the suggestion did come from the IMDA though). It would only help those would could afford a new (to them) car, after all. I sense if the government did any kind of economic incentive scheme, they're going to be wanting to target a much broader cross section of business and the general public.
  22. I've spent a fair few £100k's on hookers and fast cars over the years. The rest, I just wasted.
  23. Strictly no but they were under the subheading of retail, in the list of businesses and venues which must close when lockdown was imposed a few weeks ago. https://www.gov.uk/government/publications/further-businesses-and-premises-to-close/further-businesses-and-premises-to-close-guidance
  24. All retail that isn't currently open (or will be on June 1st), can do so June 15th onwards. I guess its up to the individual auction houses if they don't re-open though.
  25. I think a lot will depend on the returns policy. Its the thing a dealer can do to differentiate themselves from dealer Y next door. I think people will be happier (in months to come) actually travelling out and visiting eg a car dealer to look around; and be happy enough to remain socially distanced and outdoors, mainly. They'll be less keen to sit in a car and do a test drive, but there is bound to be some element of demand. Make it easy to return a car, and they'll be more likely to buy it. Do a decent PDI, don't sell something unaffordable or unsuitable and I think it will work out. I think (not 100% sure) you can cover "reasonable costs" if the car is returned based on something other than faulty. So you can cover for mileage, another owner on the V5 and re-preparing it. There will always be piss-takers but there's nothing to stop you screening out who you sell a car to (or maybe removing the returns policy eg for <£1000 stuff). I'd happily buy a very cheap or very expensive car sight unseen - its the middle I'd be unsure of.