Guide To Mis-Sold Car Finance Scotland

A 2019 report published by the Financial Conduct Authority (FCA) revealed widespread mis-sold car finance deals around the UK. If you purchased a vehicle in Scotland through a PCP agreement, chances are you may be able to claim back compensation on this agreement. 

 

Mis-sold car financing could occur if:

  1. the car dealer did not fully explain the specifics of the funding agreement

  2. they did not discuss more than one funding agreement

  3. or if they did not disclose what level of commission they would receive. 

 

If this was the case, it could have cost you thousands of pounds of lost money in your monthly repayments! 

 

Below we uncover what mis-sold car finance in Scotland is and how to identify mis-sold claims. 

 

If you believe you have been mis-sold car finance in Scotland, we’ll fill you in on how you can make a claim for mis-sold PCP compensation.

Mis-sold car finance Scotland

What Is Mis-Sold Car Finance?

Mis-sold car finance happens when you took out a car finance agreement, and you received poor advice or were not given all of the necessary information on the finance deal. 

 

PCP car finance is one of the most common ways that people buy new or used cars in Scotland. In many cases, consumers are sold a PCP car finance agreement without fully understanding the agreement. Or, they were not properly matched to that specific PCP finance agreement. 

 

This is all a case of mis-sold car finance. Ultimately, mis-selling a car finance deal results in a car and finance agreement that doesn’t suit your financial means. This could mean not being able to make all of the monthly repayments due to inflated interest rates and hidden fees.

 

If you were a victim of mis-sold car finance, then you could be eligible to make a claim for compensation on the money you overspent on the agreement. Many Scottish and UK consumers are making use of this opportunity.

How Does Mis-Selling Car Finance Happen?

There are a number of ways that mis-selling car finance deals can happen. The reason behind them is that the car dealers gain a commission from the finance company for selling certain deals. So, car dealerships sell poorly-matched finance deals to customers in order to gain this commission. 

 

One of the most common examples of mis-sold car finance is when car finance companies offer hidden commissions. In this case, the finance company gives a large commission to the salesperson. The commission is paid for through fees and interest rates. 

 

However, the salesperson does not disclose this commission to the customer. As a result, the customer ends up paying an inflated price on the finance agreement to fund the commission. 

 

Another example of mis-selling includes aggressive sales tactics. This is when the salesman pushes the customer into a certain finance deal without giving them enough time to make an informed decision or consider better alternatives. 

 

PCP mis-selling can also happen if the salesperson doesn’t do proper background and finance credit checks on the customer. So, they end up selling them a personal contract purchase beyond their means. 

 

If the car dealers failed to disclose any important information or avoided treating customers fairly, then mis-selling has likely happened. 

 

This generally results in interest charges and a fee basis that the customer doesn’t understand and probably cannot reasonably afford. There could also be extra costs involved in the loan agreements that the customer was not aware of. 

Salesman making a car finance deal with customer

How To Know If You Have Been Mis-Sold Car Finance In Scotland

You may be able to claim compensation on mis-sold PCP motor finance if your finance agreement is not what you expected it to be. 

 

This could be due to:

  • undisclosed or hidden commissions

  • a lack of proper affordability checks from the car dealership

  • high-pressure sales tactics 

  • or inflated prices and higher interest rates that are not actually necessary

 

You could also make a claim on your PCP agreement if you were sold a car expecting different emissions levels. 

Whatever the case, you will need to carefully review your hire purchase agreements and PCP deal to identify whether mis-selling took place. It’s important to get expert help here, as identifying mis-sold finance agreements can be tricky.

Our team of experienced solicitors will help you identify whether your mis-sold PCP claim is valid or not. If it is valid, we’ll help you determine how much you will be able to claim compensation for and get the claims process started. 

What To Know About PCP Claims In Scotland

As we have become more aware of car dealer mis-selling, PCP claims in Scotland have become increasingly common. If you purchased a new or used car in Scotland through a PCP car finance agreement between March 2016 to December 2020, then you may be eligible to make a claim. 

 

PCP claims need to be reported to the Financial Ombudsman Service (FOS). They will review the claim and decide whether the car dealer was guilty of mis-selling. While there are many different variations of PCP claims, the general idea is to claim back from car dealers guilty of overcharging unsuspecting customers. 

 

The amount that you could claim compensation for depends on:

  • how much your PCP agreement was

  • what your interest rate is

  • how long into the loan term you are

  • and what specific loan terms were involved

 

In most cases, the compensation amount ends up being hundreds, or thousands, of pounds. 

 

The aim of making a PCP claim is to recover money spent on monthly payments, interest rates, and hidden fees that you should never have had to pay. The amount you can claim depends on the type of PCP deal you were sold, how it was sold, and whether the agreement actually matched your financial means.

People driving in car at sunset

Mis-Sold PCP Finance Claims Scotland – We’re Here To Help

Identifying mis-sold PCP deals can be tricky. There’s a lot to consider with these finance claims, and you need to be sure that your claim against the car salesperson or finance provider is valid. In order to do this, you will need to work with experienced solicitors.

 

Our panel of PCP solicitors in Scotland will help you build a solid case and identify whether your claim is valid. Working with Paxton Willis will also help you obtain bigger commission payouts and restructure your agreement for the most favourable lending terms.

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