Dealers are "taking customers for a ride" by not being clear about how much interest they’ll pay on a motor, according to Which? Car.
It said details of car finance deals weren’t properly explained and on some occasions interest rates weren’t even mentioned during an undercover investigation.
Not one of the sales staff at the 15 dealerships verbally told researchers the total cost of the interest on a finance agreement.
Two-thirds failed to mention the APR and a third didn’t include it on their written quote either.
Without this information, it’s impossible for a buyer to work out how much interest they’d pay on a finance deal.
Not including the APR in a written quote also contravenes the Consumer Credit Act.
One salesman even refused to give a written quote at all, wrongly claiming that to do so would break the law.
“When you take out a mortgage, the bank or building society has to clearly state APR rates up front, and explain terms and conditions fully," said Peter Vicary-Smith, chief executive, Which?.
"We think car finance deals should be conducted in the same way. We urge car buyers to avoid showroom finance deals if they think dealers haven’t given them all the necessary information.”
Which? reported its findings to the OFT, which said it was disappointed some dealers didn’t appear to be aware of their obligations or are simply refusing to comply.
The OFT promised to take enforcement action where necessary.