As a representative of said industry I feel the need to dive in on a few of these points. I want to be clear that I am not justifying or defending the practices of any individuals, garages/franchises. Just explaining an industry standard. Having worked in the industry for 16years and through my job I work in partnership and visit many main dealers, independents and supermarkets across the UK. Which is why I feel qualified to comment.
Firstly in response to the OP, the reason they advertise monthly payments is because approx 80% of people borrow money from somewhere to fund a car purchase (industry stat not guess). That may be from bank, direct lender or dealer. With the growth in Personal Contract Purchase programs and also manufacturer subsidised interest rates, sometimes people can afford a better car than what they first anticipated. So with this in mind which price is most relevant, vehicle price or monthly payment? If you really want to know the vehicle price then, alongside the monthly price, they have to show the finance example, detailing deposit required, interest rate and vehicle price.
2. New Car Supermarkets? Really! An idea that worked so well for Richard Branson, (Virgin Cars) and Tesco. Manufacturers still use franchised outlets because it gives them more control and protection over their brand, can you imagine what a company like Yes Car Credit or Carcraft would do to the reputation of Aston Martin! Ask yourself, would you give £15000 to someone who didn't know about the product they were selling? People expect salespeople to know things like MPG, spec and in some case towing weights. Imagine the amount of information you would have to store if you were selling every single make, model, specification, engine and gearbox variant.
3. As to Add-ons, since the introduction of the FSA, now FCA and PRA. All dealers have to make customers aware of what insurance products they offer and how they benefit you. These have been put in place to PROTECT their customers and make customers aware that they do not have to accept paying for things like punctures and repairs.
4. Now because the internet and online brokers have not only forced dealer margins down to a point where some cars sold at full price will only have £100-200 profit (of which HMRC take 20%), but also reduced the income to service departments. Greater reliability and longer service intervals have also impacted on this. Garages have had to look for additional income streams. Most dealer groups rely on the income from finance and insurance related products.
5. As in industry regulations are a lot tighter than a lot of others, prices are investigated to make sure that customers are treated fairly. Part of the FCA guidelines is a section entitled "Treating Customers Fairly" which has to be adopted at all levels of the business and dictates that no customer should be treated any differently, whether they have available funds or be buying on finance. It also dictates that the prices charged must represent value for money.
As to which products are good and bad, this is down to the individual to decide, personally I would not be without GAP on any car, because having seen how many people benefit from this I know it works and when compared to your car insurance, the comparative cost is very little.
As I said I am not endorsing the practices of individuals (and I am aware some of it untoward, just look up the C4 series "The Dealership, I wouldn't buy from them!) and explaining that this is not an industry trend. I am also outlining some of the reasons why the industry operates as it does. That's it rant over
