Feel I've Been Conned by Main Dealer on Trade-in

mikes48

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Wondering if anyone has any constructive views or advice on the situation I'm in.

I traded in my wife's car for a newer one from a main dealer a couple of weeks ago, to be paid for by the value of the old car, some cash from me, and HP for the balance, payable over 30 months. I rejected all the usual extras, insurances etc, as I don't consider them to be good value for money, and this was recorded on a check-list of which I was given a copy. This was on the Saturday.

I had to arrange insurance for the new car so I agreed to pop back on the Monday with the insurance certificate and to sign the papers. So I called in on the Monday and the salesman then informed me that the company had worked out an even better deal for me;- they would include SmartGuard Protection and Cosmetic Repair Insurance, worth £399 each, and the monthly repayments would actually come down by £1 a month - which I must say totally flummoxed me.

I reminded him that I didn't want any extras, and asked him to explain just what was going on, as I wasn't comfortable with what seemed a bizarre change. He openly said that he didn't know how they did it, but the firm's Business Manager had gone through the figures and had worked out this great deal which left me in pocket with the added bonus of the two products. I asked to speak to the Business Manager, but he wasn't available and some other guy came out of the office and said it was something to do with the amount you borrow and the rate of interest that you are charged. At no time was I asked (on that occasion) whether I wanted these products nor was I informed that I was being charged for them. I was given to believe that it was some sort of financial wizardry that the Business Manager had come up with.

I wasn't convinced, but given that it was actually cheaper I reluctantly agreed.

It was only went I went through the mass of papers - 34 pages - that I worked out what the dealer had actually done -

I contributed a used car and around £4,000 in cash, with all extras declined, and agreed to borrow the balance on HP, payable in 30 instalments of £403. What the dealer has done is to divert £798 of my cash deposit to buy these unwanted "extras"; they have understated my deposit to the finance company by - you guessed it - £798; and they have increased the amount I have applied to borrow by - right again - £798, taking my loan to £10,798 rather than £10,000. But the monthly instalments have come down to £402.

So by inveigling me into borrowing £798 more than I had expressly agreed to, the dealer has been able to spend £798 of my money of two unwanted products, neatly side-stepping my express refusal to buy. No doubt the extras will boost the dealer's profit/commission or whatever, and he will be feeling very pleased with himself.

As for the monthly payment being marginally lower, despite the HP being £798 higher over the same term, I can only assume that the finance company is taking a hit on the interest rate, whether unwittingly or in collusion with the dealer I don't know.

I've asked for a meeting with the dealer to express my disquiet about their selling methods, and what they propose to do about it. I know I signed the agreement and should probably have stood my ground; and the 14 day cooling-off period has expired, but if they won't play ball one way or another I will need to escalate it - Motor Trade dispute resolution, FCA, their Head Office, the vehicle manufacturer who is providing the finance, Trading Standards , whoever.

Anyone else agree that their selling methods may well be dishonest, deceitful, unethical or whatever? - or, should I just forget it?
 
That's certainly not on. In your shoes I'd have been far happier is they had approached me and told me what they had done and I'd have probably OK'd it as everybody is a winner but doing and not telling you isn't right.

Have you already taken delivery of the new car with these added extras? If not I'd probably be asking them to swap the value of the extras for something you do actually want or maybe used to cover future servicing to the same value. If they don't play ball I'd take it further.
 
If I am reading this right, you are getting extra's included for less cost to yourself. I assume that the length of repayment is the same as you originally agreed to? (i.e now 30 payments of £402 instead of 30 payments of £403)

If that is the case, take it as a winner all round. I wouldn't pay for those extras, but as a freebie no problem
 
If the repayment period is the same then you paying less but getting more so do not see where your problem is. You have 'paid' for the extras but by doing this they have got you a better deal on the finance (maybe a lower interest rate if you go over a certain amount on finance). You are still paying less money than you were before so were is the complaint. The only issue I can see is could they have given you the better interest rate without having to 'buy' the extras. if so then this would have cost you less again. But as the deal is currently you are paying less money and have got more out of it like you originally agreed too, how they have achieved this seems of no real consequence to me.
 
The complaint is that this should have been proposed to him. It's quite a common tactic to increase commissions for the "sale" of these extras, but to not explain and ask permission first is unfair.
 
I would agree with Epicurus, he's not being conned as there's no extra money to pay but they have been extremely dishonest in the way they've gone about it.

I'd call their bluff and say as you don't want any of that extra stuff that you'll expect a £798 discount and the same finance rate.

* Go out and see if you can get a better finance deal elsewhere first and use that as leverage, you don't have to take the dealers finance.
 
Is/was there an interest rate threshold at £10K?
I agree if you expressly asked them not to included the extras then they did this they have been playing a bit fast and loose. They've effectively increased your debt by 8% on a depreciating asset
 
From my quick calculations they've gone from 15% Apr on a £10k loan to 8.6% Apr on a £10,798 loan. Why were you not offered the lower rate first time making your payments around £370 a month.

Ps, your now paying interest on 2 products you didn't want. The only winner is the dealer and finance company as this doesn't sound like the best deal for you.
 
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They did not put the extras in without the OPs permission though. In the second meeting, from what I read, they dealer has said that they have done a deal that means the OP gets the extras and pays less per month. Now I can see that by not saying how they have done this means they are not exactly being transparent to the customer which can come across as being conned. However, the dealer has provided all the information in the paperwork (not the most customer friendly way of doing it) and also told the OP about it before they signed. It is not like they made these changes and then got the OP to sign without telling them.
The question about the interest rate and why the OP could not get the lower rate without the extras is a valid one. However, if the lower interest is not available without the extras for what ever reason then at the end of the day the OP currently has a better overall deal than they originally were happy to go with. Whether it is the best deal the dealer could have done is another matter but that does not mean the OP has been conned. At the end of the day the OP was happy to go with the original deal, the dealer has then offered a better deal which gives the OP more and they pay less so how can that be a bad thing?
 
It's about honesty as far as I'm concerned. The dealer should have told the OP what the plan was and everybody was a winner. Instead they've done it sneakily hoping he wouldn't notice.
 
I can see the annoyance, but looking at it from another perspective.

You knew that they were charging you more, ie 2 x £399 so it should be no surprise that the loan amount has increased, unless you expected them to have valued your car at more?

You knew the loan repayments would reduce which they will.

Are you annoyed because they didn't explain how they were doing it? Or are you annoyed because you have loaned more than you agreed?
 
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If by borrowing slightly more and putting less cash in the OP could have got a much better interest rate, hence a lower payment and the overall deal would have been noticeably cheaper.
As it stands the repayment may be lower but should the OP need to settle the finance there will be more cash required and the £798 extras will have no impact on the value of the car so the OP could lose out.
If the OP keeps the car and pays the finance as agreed there is not much harm.
The dealer should have been clear about how the new deal was structured which is the real problem here IMHO.
 
You knew that they were charging you more, ie 2 x £399

I'm not sure they were that open about it. They said they had arranged a new deal whereby they could include them, and him still pay less.
 
If it's the case that a loan of more than £10k would trigger the lower interest rate, then surely the OP could have paid £100 less deposit, borrowed £10,100 and made a significant saving?

If that isn't the case then it wouldn't matter to me, as you've ended up getting more for less. Yes the dealers have done it for their own extra profit, let's not pretend they care about saving you anything, but if you both win then I don't see a problem.
 
The basic point is that the OP was happy with the original deal and they now have a better deal (more for less) hence they are still better off than if the dealer had done nothing. In fact if the dealer had done nothing then there would be no thread since the OP would have spent the higher sum and got less. The fact the dealer may have been able to offer the OP a better deal than either the first one or the revised one is another matter. At the end of the day they are there to make money and will get the bet deal they can get for themselves and you as the purchaser are responsible for getting the best deal you can for yourself. In reality this means you met somewhere between the 2. How close you are to either end depends on how strong or good you are at haggling. Sounds like the OP had not negotiated a particularly good deal initially, is this the fault of the dealer? The dealer has then given the OP a better deal (albeit one that probably gives them something more as well) and is being slated for that. Had they done nothing then the OP would have happily gone with the worse deal as far as I can see. The issue seems to be that in doing what the dealer has they have exposed their profit margin which has meant the OP has found out that the initial deal they were happy with is not as good as they thought it was!!!!!
 
No...the basic point is the dealer was underhand about it and it's not on.
 
There's another side to this.
We all know and understand that the dealer makes a good living selling 'extras' that have a huge mark up. The profit on the car itself is usually very slight. The profit on things like gap insurance and paint coatings or interior seat protection applications are massive.
Here the dealer has improved your Apr figure by increasing the ticket price.
yes, you have benefited from their raising the total price high enough to attract the lower interest rate, but they've done it by adding extras that line their own pockets.
I would have rather have achieved that by adding improvements of MY choice. Better stereo, glass roof, tow bar etc.
I would be telling the dealer principal (no one else) that the car is being refused unless the deal is to your advantage, not theirs.
 
Yep, that's what I said in my first post. If this lower rate from higher borrowing is OK then it should have been spent on extras the OP actually wanted.
 
Don't apologise :) Just saying that I agree with you :)
 
Thanks for the comments guys, and I can see that, as with everything in life, there are two sides to every story.

A few clarifications -

- the car is used, not new, so not like there's any worth-while extras to add -
- we collected the car the following day, so yes, we signed and that may be the end of it - we'll see -
- what may have not been completely clear in the OP was that despite my incredulity that they had managed to include £798 of extras at a slightly lower overall cost to me, and me asking how on earth they had managed to achieve that, he didn't mention that they had taken the simple expedient of bumping up my loan from £10k to £10.798k to pay for it. He quite openly said that it was just something that the business manager had spotted. Unfortunately, I didn't spot it.

If the firm had any integrity their approach would have been to suggest to me that, because of the way their interest rates are banded or whatever, I might be interested in adding these two enhancements, and I would actually save a little money over the life of the loan. Oh, and all I would need to do is to borrow an extra £798 to pay for them. I could then have made an informed decision as to whether I wanted them. I can say quite honestly that my answer would have been "Thanks, but no thanks".

I fully see the point that I may have effectively got something for nothing - but it isn't something I even wanted, and whatever the rate of interest on the HP, I have had to borrow the money, and pay interest on it for 30 months, to pay for it. The only winner, in my opinion, is the dealer, who has "earned" whatever his cut or commission is for selling these extras. So yes, there is a view that everyone's a winner, but it isn't my view.

Since buying the car (which is absolutely stunning, btw, and my wife is totally delighted with it, which is what really matters) I have had three requests for feedback on the buying experience; one from the dealership, one from their head office, and one from the manufacturer's finance company, and I have held off responding to all of them until this is resolved.

Anyway, I'm meeting the dealer principal on Monday afternoon to express my concern.

I will be angling for them to credit my HP acount with £798, and they can of course cancel the extras.

As an alternative I like Desmo's suggestion of looking for something actually worthwhile, such as say 2 year's servicing.

Obviously my feedback on the buying experience will be tempered by the result :devil:

I'll keep you informed.
 
Although you have borrowed more you are actually paying less. So you are not paying more interest on the money you have borrowed. Over the full 30 months you will have paid less than if you had not had the extras. If you can change those extras to something more useful to you then great but think the Smartguard would have already been applied to the car so may not get very far with that one. The protection one sounds like an insurance so may be able to get that one changed. Hope the outcome is what you want in the end.
 
Will be interested to see how the dealer plays this one. Surely they knew the rate would be cheaper if you borrowed a bit more? Even if they didn't and it was only pointed out to them when they applied for the actual finance they could have come back to you and offered some extra services which at the same time would have reduced your monthly payments. They would have ended up with one VERY happy customer instead of one who is feeling a little conned.

Too many people in business look at the short term game and not the long term gain.
 
Who's to say the rate is cheaper as he's borrowing more?

Again how much interest is charged by the dealer according to what they think they can get away with, hence the salesperson always tries to find out what your monthly budget is. It's quite possible it was worth their while to drop the interest rate a bit and make the huge margins off the items the OP didn't want.

Something else I though of. As the OP is borrowing more, if they decide to change it or it gets written off before the end of the finance agreement they'll owe more on it and the settlement values will be higher

I'd be less and less happy about this.

Too many people in business look at the short term game and not the long term gain.

That is a lot of car dealers. Screw every customer that comes through the door for the maximum they can get away with. Not just small independents either, large chains of manufacturer approved dealers.
 

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