Car HP and secret commissions

[1970]

Hi,

 

Story so far in brief:

 

I used an online car finance company last year - they are regulated by the FSA as a finance broker.

 

They advertise that you can find a car at a garage and they will arrange the finance for you.

 

They actually offer you a selection of cars also which I was happy with and chose a vehicle from their list.

 

The car was priced at £5500 and the website arranged the loan with an external finance company.

 

By pure chance while searching on google I found the actual garage that was selling the car. The garage photo clearly showed the registration plate etc and the price on the site was £5500.

 

Therefore I assumed the broker would get a commission from the finance company.

 

On the day I signed and sent back the agreement I checked the garage website again to see if the car had now been sold (ie to me) and to my surprise the car had been discounted in a sale to £4000. I have an electronic copy of the website displaying the price.

 

I thought it was too late to do anything about it, but a few days after delivery I challanged the broker on the price.

 

They said they do not get a commission from the finance company. They claim they actually purchased the car for £5000 and sold to me at £5500 making a £500 profit. This is how they make their money - so they say.

 

My concern is that I now have on finance a car which should have cost me £4000 instead of the £5500 written into the agreement. Also, I have a suspicion that the broker recieved a commission.

 

The reason for this suspicion is that their site says "buy the car of your choice from the dealer of your choice" and there's no mention of them adding their profit to the dealers price. Therefore, how do they normally make their money? In my view it must be by way of a commission on the finance.

 

Does anyone think I have a legal claim here?

 

Something to consider is that I am happy with the car and would be happy to carry on paying the monthly payments. I'm not really wanting to cancel the agreement and send the car back unless I got a refund big enough to go and buy another car cash.

 

1970.

Edited August 20, 2009 by 1970

[postggj]

Interesting Question 1970 For Which I Will Engage The Little Grey Cells

 

Its Expected That A Broker Would Receive Commission Payments But These Must Be Declared To The Borrower

Wilson V Hurstanger

 

My Own Opinion Would Be They Make There Money On The Finance Or/and Ppi Angle

 

You Would Need To Get A Copy Of The Underwriting Sheets For The Full Break Down

 

The Only Way You Would Get These Is Through A Court Enforcement Order As If Its Prooved Commission Payments Were Made With Out Informing The Borrower, Its Goodby Agreement And Prob Be Able To Keep The Car As Well

[1970]

wow - could be interesting.

[postggj]

Did You Have Ppi Or Any Other Micky Mouse Insurance

WHO IS THE FINANCE CO

[1970]

British Credit Trust is the finance company (BCT).

 

I have PPI (not part of the charge for credit but as a seperate document)

 

GAP Insurance

 

And, having checked the agreement again just now I see there is an "Arrangement" fee of £750 in the section where is details the charge for credit and what that charge is made up of.

 

I have it in writing also from the broker website that they are not paid a commission.

 

Is the arrangement fee charged by BCT for setting up the agreement??

[postggj]

Interesting

 

I Realy Do Need To See The Agreement

And The Doc Ref Ppi

[1970]

PM me your email address as I have it all in PDF format.

[postggj]

Sending Pm

[1970]

Done.

[postggj]

1970

 

got the docs

 

i know my eyes are bad but i cant see any financial details ref the ppi on the agreement

 

ime looking for

cost of insurance

what is the insurance

cost of credit for these insurance products

 

etc etc

 

how much are they costing you and where are they listed

[1970]

Ok, the GAP insurance was a one off payment in month one of £171.00 which is shown on page 1 of 2 of the GAP document (page 9 of the PDF).

 

The PPI costs is on page 12 of the PDF and is shown at £20.76 per month and is added to my normal monthly payment.

 

None of the above forms part of the credit agreement. It is as if they are seperate payment plans.

 

There's no additional interest payable for these premiums.

 

1970.

[postggj]

leave this with me for a few days

 

i think they have fracked up big time

 

The PPI costs is on page 12 of the PDF and is shown at £20.76 per month and is added to my normal monthly payment.

 

None of the above forms part of the credit agreement. It is as if they are seperate payment plans.

 

shame

[1970]

Excellent. My main gripe is signing an agreement for £5500 when the garage was selling the car for £4200.

 

Either I pay an arrangement fee or the broker makes a mark up. Not both.

 

Many thanks.

 

1970.

[1970]

One thing to add, the broker website states the following:

 

FAQ: Do you sell vehicles?

No, absolutely not. We only provide the finance for you to buy the vehicle; we're experts within our field and focus our energy on ensuring we get the best possible finance deal for you. In our opinion, we believe YOU are the best person to choose the vehicle YOU WANT from the dealer of YOUR CHOICE, at Car Loan 4U we believe in putting you in complete control.

Therefore, why would the get involved In marking up the price of a vehicle to make their money if they have nothing to do with the vehicle sale but just the finance?

 

1907

[postggj]

like i said

 

the extra you paid was commission payment but of course, you were not told of this

 

get that info and the sky is the limit

 

some times in an sar request, that info slips through

[1970]

I'm half a payment behind which I shall bring up to date at the end of this week then I shall make an approach to get this sorted.

[1970]

postggj - any further thoughts on the agreement?