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Customers given poor car finance advice

Dealerships repeatedly fail Which? test

Car finance

Which? found that some dealers weren’t providing the required information

A new Which? investigation into standards of advice on car finance finds some sales staff withholding key information.

Which? researchers, posing as prospective car buyers, tested  24 car dealerships across the UK. Having chosen a car, they requested an explanation of their finance options and a written quote to take away with them. Less than half of the dealerships passed our test.

Which? car finance test

Which? fieldworkers noted the number of dealers who provided a provisional written quote, gave interest details that included an annual percentage rate (APR), provided details on administrative charges and – where relevant – gave some description of the conditions under which the car could be returned to the dealership for a ‘Guaranteed Minimum Value’ at the end of the deal. Eleven dealerships in total provided the full basic information.  

Car Finance Advice put to the test
  SAF-Approved (/12) Not SAF Approved (/12) Total (/24)
Provided a written quote? 9 12 21
Quote contained full interest details, inc APR? 7 6 13
Quote included admin charges? 7 6 13
Gave required information [a] 5 6 11

Table notes

  1. Provided a written quote, with details on interest costs (inc APR) and related fees, and where quoting PCP deals, outlined the conditions of the Guaranteed Final Value.

Approved dealerships

Twelve of the dealerships visited were approved under the Specialist Automotive Finance (SAF) scheme – a kitemark issued by the Finance & Leasing Association designed to indicate a high standard of knowledge in customer-facing staff. 

However, when it came to passing on the benefits of their expertise to customers, Which? found no significant difference between approved and non-approved dealerships.

Room for Improvement

Which? loans expert, Dean Sobers, says: ‘Figures suggest that increasing numbers of people are using car finance schemes as a means of funding their purchase. Whilst there are lots of competitive deals available, it’s disappointing to find that on the shop floor, consumers are still not always being given the information required to sensibly compare offers – particularly with such large amounts of money involved. There’s lots of room for improvement.

‘If visiting dealerships in the process of buying a new car, always be sure to request written information specifying monthly payments, the total amount of interest to be charged, and a breakdown of any fees or possible penalty charges that could apply.’  

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