Well, most cars are bought on finance here, so that's not really surprising. Plus Martin Lewis, who is a sort of personal finance crusader has been shouting from the rooftops about this issue.
It's a really weird one, effectively, car dealerships can offer finance to customers. Generally many of these customers won't be able to get an unsecured loan for the value of the cars they're interested in, which is why they get finance through the dealerships. The dealerships make commission on the finance they sell. They had to disclose this for many years in the finance paperwork. The court case that was lost by a dealership was that the size of the "secret" commission wasn't disclosed to the car buyer who might have sought finance somewhere else had they known. This is all quite unlikely because if you were going to do that, you'd likely have taken out a loan prior to going to purchase the car, which is why this is so odd.
The government is halfheartedly signalling that they may seek to limit through legislation any compensation because it's likely to ruin the UK car lending market which will then kill off what vestiges of car manufacturing still remain in the UK.
PaulHoule•6mo ago
When I bought a new car in the US. circa 2010 I got a really great financing deal (0.3% interest) from the dealer that was backed by the manufacturer because they were trying to move metal. When the car got totalled and I was looking for a replacement I was in a hurry and took the loan I got from the dealer which probably wasn't the best I could have gotten. Previously my credit union had been pretty aggressive about giving out car loans but when I called them up they weren't that interested.
physicsguy•6mo ago
It's a really weird one, effectively, car dealerships can offer finance to customers. Generally many of these customers won't be able to get an unsecured loan for the value of the cars they're interested in, which is why they get finance through the dealerships. The dealerships make commission on the finance they sell. They had to disclose this for many years in the finance paperwork. The court case that was lost by a dealership was that the size of the "secret" commission wasn't disclosed to the car buyer who might have sought finance somewhere else had they known. This is all quite unlikely because if you were going to do that, you'd likely have taken out a loan prior to going to purchase the car, which is why this is so odd.
The government is halfheartedly signalling that they may seek to limit through legislation any compensation because it's likely to ruin the UK car lending market which will then kill off what vestiges of car manufacturing still remain in the UK.
PaulHoule•6mo ago