New car dealerships mis-selling finance and insurance add-ons

New car dealerships mis-selling finance and insurance add-ons

Research carried out by the Institute of the Motor Industry (IMI) has found that new car consumers often feel pressured into purchasing finance and insurance add-ons when buying a new car from a dealership.

IMI, the professional association for the automotive industry, found that 60% of new car sales processed in the UK also included an additional finance and insurance (F&I) product as an add-on.

Of those who were surveyed as part of IMI’s research, an overwhelming 45% claimed to have been pressured into buying an F&I add-on by a car salesman the last time they purchased a vehicle from a dealership.

While 42% of those involved in the research said they avoid new car dealerships altogether, due to a lack of trust in car salesmen, who often adopt a hard-sell method in their negotiations with consumers.

According to the IMI study, dealership salesmen were voted the third most untrustworthy professionals, with 75% claiming to have no faith in their sales pitch.

Despite The Financial Conduct Authority (FCA) introducing changes to the Consumer Credit Act, to protect the interests of consumers purchasing finance and insurance products, 33% still claim to have been overcharged by a dealership.

A total of 37% involved in the research said they would feel more comfortable purchasing a new car, finance and insurance products from a dealership accredited by an industry body, such as the IMI F&I Accreditation, which ensures members operate according to an ethical code of conduct.

Steve Nash, Chief Executive at IMI, said: “Sadly our research highlighted that nearly two thirds (63%) of car buyers find the process stressful”.

Mr Nash believes the auto sales industry needs to do more to reassure British consumers who are disillusioned by the outdated and pushy tactics used by many car salesmen at dealerships.