Lapsed Finance From Delays Resulting in APR & Cost Increase

[ASB]

Hi all

Wondering if anyone has had a similar experience or can provide some guidance to the below please?:

We ordered an MG4 SE LR in white in September, and was given an estimated delivery of 22nd December. The finance agreement was based on 7% APR at the original sale price. We put down a £250 deposit and signed the paperwork, and noted that the finance agreement was valid for 3 months. The dealer at that stage told us if it went beyond that, that it would "just be extended"

The 22nd came and went and, as of 9th January, we have had no updates from our dealer at any stage of the process, with zero communication. We phoned today, and they have told us that they have no idea when the car will be delivered and cannot provide any updates whatsoever.

We queried whether the finance had been "extended" (as they said) and was told that because the finance had lapsed, we would now have to submit finance based on 8.9% APR at the new sale price. They also said that this would result in another credit check.

This doesn't seem correct to me, given that we paid a deposit at that stage and signed paperwork based on 7%? It also seems illogical to have a three month deadline, if they knew it was going to miss delivery in December?

 

[Cloggsy]

I ordered an MG ZS EV in March ‘22. Our dealer was far from communicative (like yours), We were ‘guaranteed’ our quoted price and finance deal 4.9% at the time…

Anyway, the months passed & we heard nothing…

The MG4 came out & in November we went to the dealers to test drive the 4. It was only when we left the dealers after test driving the 4 that a few days later, we were informed that Santander (MG Finance) could no longer guarantee the quoted price for the ZS and the Finance rate had now gone up to 7.9%. By the end of November, I had become fed up with both the dealership in question and the wait for the MG ZS, so I started to ring dealerships looking for an MG4.

Fortunately, I spoke to a dealer who had a cancelled order for a Black MG4 Trophy, which I collected on 9th December & I am very happy with. My daughter still has her order in for an MG ZS, but is now looking elsewhere for a car, as she too is fed up of waiting!

Now finance rates have risen again to 8.9% & counting

The moral of the story. I guess, if you want a car, then it pays to ring around and find the car you want and be prepared to travel to collect. The days of ‘discounts’ and inter-dealership transfers of vehicles are a dim and distant memory. Don’t rely on the MG Stock Checker on the MG Website or Autotrader either. Most adverts state ‘in stock’ & they aren’t!

 

[Deleted member 10041]

Hi all

Wondering if anyone has had a similar experience or can provide some guidance to the below please?:

We ordered an MG4 SE LR in white in September, and was given an estimated delivery of 22nd December. The finance agreement was based on 7% APR at the original sale price. We put down a £250 deposit and signed the paperwork, and noted that the finance agreement was valid for 3 months. The dealer at that stage told us if it went beyond that, that it would "just be extended"

The 22nd came and went and, as of 9th January, we have had no updates from our dealer at any stage of the process, with zero communication. We phoned today, and they have told us that they have no idea when the car will be delivered and cannot provide any updates whatsoever.

We queried whether the finance had been "extended" (as they said) and was told that because the finance had lapsed, we would now have to submit finance based on 8.9% APR at the new sale price. They also said that this would result in another credit check.

This doesn't seem correct to me, given that we paid a deposit at that stage and signed paperwork based on 7%? It also seems illogical to have a three month deadline, if they knew it was going to miss delivery in December?

Very poor from the dealer, in my opinion they should honour the deal you signed. The dealer I used guaranteed the car price and Apr.
What's to stop your dealer chancing their luck with regards the price rise in the car, they could use the same logic.
Very poor wait patiently from September then they try and pull this.

 

[Smendon]

Very poor from the dealer, in my opinion they should honour the deal you signed. The dealer I used guaranteed the car price and Apr.
What's to stop your dealer chancing their luck with regards the price rise in the car, they could use the same logic.
Very poor wait patiently from September then they try and pull this.

That’s not how it works unfortunately. The finance company who the loan will be through will have small print stating that the rates are subject to change after a period of time.

This is to do with having to re-run the finance quote to check a customers credit file hasn’t changed (gotten a bankruptcy since the initial application for example) and at this point the rate can change.

The dealer has not control over that, but they could/should have made you aware that the rate can change if there was a long delay.

 

[Deleted member 10041]

I get it re the credit checks etc, however genuine question do MG use the same finance company UK wide, as this could be an issue for a lot of people

 

[Smendon]

I get it re the credit checks etc, however genuine question do MG use the same finance company UK wide, as this could be an issue for a lot of people

Santander is who they use to underwrite the finance for them.

 

[liambobson]

I specifically asked this question as also ordered back in September before the price increase & interest rates increase. I was told I would not have to reapply and the agreed deal would be honered. (Waylands Newbury)

 

[Ayoull]

I get it re the credit checks etc, however genuine question do MG use the same finance company UK wide, as this could be an issue for a lot of people

The other thing is the finance isn't binding to either side until signed which is another thing to consider

 

[Smendon]

The other thing is the finance isn't binding to either side until signed which is another thing to consider

That’s why so many people had their mortgage deals pulled and the rates changed last year.

 

[Cocijo]

These long waiting times create all these issues, which is why I hate them and won’t wait a long time for a car. Long waiting times can mean;

The cars model specification can change while waiting and you could end up with an old spec model.
Finance deals change and impact payments so it’s harder to budget.
Your part exchange value is undecided/not fixed so your deposit is also not confirmed.
Other models can come onto the market that are more desirable and available faster.
The car that you are getting has a price increase and the dealer won’t honour the original sale price.

Dealers should be more up front about what happens with long waiting times, but they won’t because some people would walk away.
I am always amazed at how patient some people can be and will wait 12 month+ for their car. Unless It’s a really desirable sort after car E.g. Porsche, Ferrari, either keep your money in your pocket or go elsewhere - cars are always available.

 

[thejaybeeok]

So fed up with waiting (18 weeks so far) for MG with no build date or delivery date, I went to a Honda dealership. They showed me their ordering system which has all the Honda cars available in the UK and dealers reserve them as they get orders. It is completely transparent.

This is in complete contrast to MG who run their order system as a lottery. I haven’t paid a deposit, I’ve bought a lottery ticket from MG.

 

[siteguru]

I specifically asked this question as also ordered back in September before the price increase & interest rates increase. I was told I would not have to reapply and the agreed deal would be honered. (Waylands Newbury)

Did you get that in writing?

 

[Deleted member 10041]

Santander is who they use to underwrite the finance for them.

This could basically happen to everyone who is waiting then!

Obviously people ordered before the 1st of October when the Apr was 7% I think. Then it went up to 7.9% now 8.9% as of the 1st of January.
Anyone that placed an order at 7% and get told it's changing to 8.9 are going to be hugely P****D off, if it happens.
As you say all in the small print and out with the dealers control.

 

[Beatts09]

I specifically asked this question as also ordered back in September before the price increase & interest rates increase. I was told I would not have to reapply and the agreed deal would be honered. (Waylands Newbury)

I ordered mine just before price increase, was told by Richmond (Southampton) deal agreed would be honoured so fingers crossed - I was also told around 20 weeks too

 

[siteguru]

Did you get that in writing?

Repeated ... for all those saying they were told that the deal would be honoured.

 

[ASB]

Really interesting responses, thanks all so far.

So, completely correct that it is out of MGs control as finance is offered by Santander, and it is all in the small print. However!, as I found out today, MG are capable to offer longer acceptance periods on their finance proposals - for the MG ZS they have offered people 6 months. As a broker, MG will gain from higher APR too.

They could have also re-submitted the finance at 7% prior to it increasing to 7.9% - they slipped up and told me that they have foresight of when the APR increases will occur. I was told today that they can re-submit it based on 7.9% to avoid the 8.9%, provided we re-submit today. When I asked why they couldn't do that last month for the 7%, they had no answer for it.

To me, this seems like a classic bit of dealer trickery - offer up a low 7% taster and get the orders in. Give everyone a 3 month acceptance proposal, delay the cars after 3 months, then whack up the APR to 8.9%. Customer has no recourse and MG can charge out the existing orders that they took on a 7% basis at 8.9% (or more, as it's going up again I'm told).

End of the day, what's the point of offering 7% if there's no cars ready to be delivered in that timeframe/APR rate period?

 

[Beatts09]

Repeated ... for all those saying they were told that the deal would be honoured.

I have just had email to confirm my dealer - Richmond (Southampton) will honour both sale price and APR from agreement signed, if they go past the dates quoted originally.

 

[Deleted member 10041]

I wonder how some dealers are saying they will honour the Apr rate and others aren't, surely the same for everyone as Santander run it

 

[Beatts09]

I wonder how some dealers are saying they will honour the Apr rate and others aren't, surely the same for everyone as Santander run it

You would like to think so...

 

[AdeMcG]

These long waiting times create all these issues, which is why I hate them and won’t wait a long time for a car. Long waiting times can mean;

The cars model specification can change while waiting and you could end up with an old spec model.
Finance deals change and impact payments so it’s harder to budget.
Your part exchange value is undecided/not fixed so your deposit is also not confirmed.
Other models can come onto the market that are more desirable and available faster.
The car that you are getting has a price increase and the dealer won’t honour the original sale price.

Dealers should be more up front about what happens with long waiting times, but they won’t because some people would walk away.
I am always amazed at how patient some people can be and will wait 12 month+ for their car. Unless It’s a really desirable sort after car E.g. Porsche, Ferrari, either keep your money in your pocket or go elsewhere - cars are always available.

quite, thinking of ending this Missed Guidance (MG - sorry wrong thread) and moving on.