My first Tesla was Black Horse HP- the Tesla system and Blackhorse were reasonably integrated. Does anyone know if Tesla\Blackhorse had a discretionary commission arrangement in place?
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Discretionary Commission Arrangements
- Thread starter NewbieT
- Start date
pharwood
Member
You can either send the template letter or email created by MSE or fill out the form on the Black Horse website:
Motor commission complaints
Motor commission complaints
pharwood
Member
pharwood
Member
This was only on TV (ITV) last night. You might be able to watch it on itvX. He explains it all there as well as answering this question.
HenryT
Active Member
Interesting topic this one.
I was involved in the motor finance trade in the 80's and 'difference in charges (DIC)' structures were commonplace amongst the larger dealers and groups. The supporting finance house would offer consumer finance support to the dealer at a given rate and whatever the dealer added to that was returned as finance commission. 2% uplift on a 3 year deal meant 6% commission on the financed amount.
The new car sales were largely supported by manufacturer supported finance houses and offered sensible consumer rates (like Ford's 4.9% and 0% offers), so the DIC deals were mostly on used car sales.
At the dealer level, the finance commission usually was a key part (if not most) of the profit in a sale, and obviously featured in whatever deal was offered. The three variables being sticker price, trade in value and finance commission. It followed that if the finance commission wasn't there, (if the dealer offered finance at the lowest rate it could,) the 'deal' would not likely be offered with the other two variables at the same level. The dealers would usually sell the car on the basis of a monthly payment amount and establishing what the buyers budget was was the key. Everything else would work back from there. The role of the 'business manager' (a dedicated finance sales manager large dealers employed,) was to structure the deal from an agreed monthly payment and often the finance commission was the easiest profit lever to pull. Another driver was that I think the dealer had to pay VAT on car sales profit but not on finance commission.
APR was quoted on finance deals as it had to be, but inevitably the dialog was about 'how much a month is it'. Often times sales were (wrongly) made on the basis of use of dealer finance being a requirement. 'If you don't take the finance we can't offer the same trade in/sticker price.'
One aspect the current review doesn't seem to acknowledge is that although the dealer may have had access to cheaper finance for the consumer, would the same deal have been offered if the lower/lowest finance rate was a feature of it?
I was involved in the motor finance trade in the 80's and 'difference in charges (DIC)' structures were commonplace amongst the larger dealers and groups. The supporting finance house would offer consumer finance support to the dealer at a given rate and whatever the dealer added to that was returned as finance commission. 2% uplift on a 3 year deal meant 6% commission on the financed amount.
The new car sales were largely supported by manufacturer supported finance houses and offered sensible consumer rates (like Ford's 4.9% and 0% offers), so the DIC deals were mostly on used car sales.
At the dealer level, the finance commission usually was a key part (if not most) of the profit in a sale, and obviously featured in whatever deal was offered. The three variables being sticker price, trade in value and finance commission. It followed that if the finance commission wasn't there, (if the dealer offered finance at the lowest rate it could,) the 'deal' would not likely be offered with the other two variables at the same level. The dealers would usually sell the car on the basis of a monthly payment amount and establishing what the buyers budget was was the key. Everything else would work back from there. The role of the 'business manager' (a dedicated finance sales manager large dealers employed,) was to structure the deal from an agreed monthly payment and often the finance commission was the easiest profit lever to pull. Another driver was that I think the dealer had to pay VAT on car sales profit but not on finance commission.
APR was quoted on finance deals as it had to be, but inevitably the dialog was about 'how much a month is it'. Often times sales were (wrongly) made on the basis of use of dealer finance being a requirement. 'If you don't take the finance we can't offer the same trade in/sticker price.'
One aspect the current review doesn't seem to acknowledge is that although the dealer may have had access to cheaper finance for the consumer, would the same deal have been offered if the lower/lowest finance rate was a feature of it?
WannabeOwner
Well-Known Member
I bought a car (from a dealer, ages ago). Can you explain this please?
I was a cash buyer. Dealer offered me 0% finance over 3 years. I said "I'm happy to pay cash, upfront. What's the discount for cash?"
Absolutely no discount for cash. Well OK, fair enough, I'll take the finance.
So I had the use of the money, over 3 years, and the finance company was without the use of that money ...
So my question is: How was money made?
HenryT
Active Member
Presumably the lender was tied to the manufacturer - like Ford Credit, Volvo Finance etc? This would typically be the case on most new car sales offers like the 0%, 4.9% etc, clearly just a means of subsidising additional sales. The 0% Ford Credit offered required a 50% deposit so the lending was low risk, the 'win' for the finance co was access to a customer with good credit standing and the scope to sell more financial products, plus it enhances the risk profile of their lending book.
At the dealer level, the dealer would typically get a sweetener (£50 from Ford Credit from memory?) for selling the finance, but more importantly they would be looking to build a 'volume bonus' for additional new car sales which often gave rise to 'special offers' at quarter/period end as the volume to count was ending. The volume bonuses were retrospective so reaching a particular threshold could trigger an increase on bonus for all sales in that period, meaning there were occasions at the end of a Qtr the dealers were almost 'giving the cars away'.
WannabeOwner
Well-Known Member
Would never have thought of that, thanks ... so basically I was a stooge!!
I should have made it less obvious that I was buying the car anyway ... and then, to get their "Caribbean getaway" volume bonus they might have given me a cash discount if it looked like they needed to do that to close the sale ... I suspect sales lady had clocked me as a "Cert".
We had a Renault Espace, loved it, they stopped making it, I bought What Car and rocked up at Seat locally to buy an Alhambra as that was "Best" in the mag. Can't remember if we even went for a test drive, I would have been much more interested in internal layout for the various combinations of "cargo" I would be hauling
Masklin
Member
On Money Saving Expert?
I'm interested in this to a degree as over the past seven years I had two Ducati bikes on PCP financed by Black Horse. Looking at the relevant part of the MSE website just now, which says it's up to date as of today, there's currently no mention of Black Horse in the list of firms who say they've never had discretionary commission arrangements.
MSE could have been clearer on the no list.
As for Black Horse:
As for Black Horse:
Zilla91
Active Member
Fired off a pair of emails to BMW and one to Audi/VWFS. Let’s see how I get on
Oxid8ter
Returning Member
Masklin
Member
AndyWarrington
Member
speedyranger74
Member
Zilla91
Active Member
Does anyone know if you can still apply even if you settled within the 14 day cooling off period or will you have had to actually paid some interest to claim back some money?
HenryT
Active Member
Zilla91
Active Member
I might have kept my money in the bank instead of paying it off straight away if the interest rate wasn't so high
