A couple
of years ago, I wrote an eBook entitled An Insider Guide To Car
Finance. Over the years a number of people bought the book and
– clearly understanding I am the font of all knowledge when it
comes to car finance – decided to write to me with their
problems.
While this has often been more than a mild pain in
the bottom, it has ensured I get to hear many of the reasons why
dealers, lenders and brokers get such a bad name – and why this
industry is in desperate need of regulation.
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And I don’t just mean the revised Consumer Credit
Act or the new EU Consumer Credit Directive: I mean full blown,
FSA-type regulation.
Simply thinking this sends shivers down my back,
because as chairman of the British Lease Brokers Association and
president of the National Association of Commercial Finance Brokers
I fought tooth and nail against regulation.
I did so in the belief that, while not a perfect
industry, we were well-intentioned and could regulate ourselves
enough to avoid the death knell of government intervention. Now,
however, this industry is becoming so badly tainted that there is
no alternative.
Dealers and online brokers appear to be mis-selling
products with the approval of lenders, happy to see a customer take
out an HP or lease purchase agreement with a balloon under the
impression that they are taking out a PCP with a guaranteed final
payment, only to find at the end of the agreement that the value of
the car is thousands of pounds the wrong way.
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By GlobalDataBrokers advertise tempting offers online on cars
that don’t exist – something that is illegal when attempted
by a dealer trying to lure customers onto his forecourt.
I even heard of one customer who was charged for
the re-spray of his bonnet because, after counting them, the
leasing company considered that the number of stone chips present
went beyond the bounds of fair wear and tear.
My sister, returning her Audi at the end of its
lease with just half the contract mileage on the clock, was told
that she needed a windscreen replaced, after it had been chipped
and repaired by Autoglass with their usual guarantee.
The chip was out of the eye line but the inspector
insisted, and she had it replaced at an additional excess cost.
When the car was collected, she was told that it would be going
straight to auction – ridiculous to the point of being
criminal!
What’s more, we are hearing from auction houses
that one reason for the recent drop in auction prices has been the
poor quality of some ex-lease cars. Clearly the work is not being
done and is still, as far as I am concerned, tantamount to charging
clients an illegal penalty.
Unless lenders, dealers and brokers stop
trying to rip customers off and start giving something back and
fostering some trust – not just for them but also for the industry
– they will get what they deserve: the man from the FSA knocking on
all our doors!
