High Court Ruling on Car Finance Payments: What It Means for Leasing Customers
Recent legal developments regarding finance commissions paid to brokers have made headlines, particularly on consumer rights platforms like Martin Lewis' MoneySavingExpert. These rulings have sparked questions about how they may impact car finance and leasing customers.
At Trio Leasing, as your dedicated boutique leasing broker, we aim to clarify what this means for you, whether you’re a current or future client.
Background: Car Finance Agreements Under Scrutiny
As summarized by the BBC:
"The vast majority of new cars, and many second-hand ones, are bought with finance agreements. About two million are sold this way each year, with customers paying an initial deposit, then a monthly fee with interest for the vehicle.
In 2021, the FCA banned deals in which the dealer received a commission from the lender, based on the interest rate charged to the customer. It said this provided an incentive for a buyer to be charged a higher-than-necessary interest rate."
These changes aimed to protect consumers from being overcharged due to hidden incentives tied to higher interest rates.
How Leasing with Trio Is Different
The structure of leasing deals offered by Trio Leasing is not directly affected by these rulings but our industry is taking action in light of it. Unlike traditional finance agreements such as Personal Contract purchase, also known as PCP, our compensation as brokers is not tied to interest rate adjustments but fixed fees set by the lender.
Here’s what you can expect when leasing with us:
- Transparent Fees: We are paid a fee by the lender, but this is not influenced by interest rates. It is a fixed fee calculated with the lender
- Full Disclosure: Before any finance is proposed, you’ll receive a commission disclosure notice. This document clearly outlines any commission paid to us by the lender for your agreement and no finance will be proposed without this agreement in place.
This approach ensures you have a clear understanding of your agreement and can make informed decisions.
Got Questions? We’re Here to Help
We know the recent news coverage around car finance agreements can be confusing. If you have questions about how these changes impact you, your business, or your future vehicle acquisitions, our expert team is here to help.
At Trio Leasing, we are committed to providing you with clear, straightforward information and exceptional service. Feel free to reach out to discuss your needs or any concerns you may have.
By addressing these industry changes head-on, we aim to give you confidence and clarity as you navigate your leasing options with Trio.