Guide To Mis-Sold Car Finance Claims

There’s a lot to consider when buying a new or used car, including your financing options. Unfortunately, thousands of people lose money during this due to mis-sold car finance with inflated interest rates and hidden fees. 

 

Luckily, if you identify this mis-selling, you will be able to claim the lost money back. This could be thousands of pounds!

Mis sold car finance

What Is A Mis-Sold Car Finance Claim?

Mis-sold car finance deals happen when a person receives car financing without the proper processes taking place. This could be when the consumer receives poor advice, when you were not given all of the information about a car finance deal, or when the risks involved with the financing weren’t made clear to you. 

 

Mis-selling occurs on all types of vehicles through financing options including:

  • personal contract hire (PCP)

  • hire purchase agreement 

  • car loans

  • contract hire 

 

A mis-sold car finance claim is when you claim back money spent on fees and interest costs that weren’t made clear to you. This often happens with PCP (Personal Contract Purchase) car finance agreements, where hidden commissions exist. 

What Is Being Done About Mis-Sold Car Finance?

The Financial Conduct Authority (FCA) ran an investigation that revealed widespread mis-selling across many types of car finance options. 

 

Anyone who thinks they have been mis-sold finance packages can make a claim against the PCP deal. This could allow the consumer to claim back any costs they spent on areas of their car financing that were not made clear to them – such as inflated interest that covers hidden commission fees. 

The Most Common Types Of Mis-Sold Car Finance Claims

When you sign into a car finance agreement, there are many possible areas where car dealers and the finance company could be guilty of mis-selling.

 

Understanding these different areas is essential for identifying mis-selling. Here are some of the most common types of claims. 

Undisclosed Or Hidden Commission

It’s only too common to have hidden or undisclosed commissions present in your car finance agreement. This happens when the car dealership salesman receives a commission from the car finance companies, and they do not inform you of this. This commission is paid for through interest and hidden fees. 

Lack Of Proper Affordability Checks

This happens when a customer enters into a PCP finance agreement that is not suitable for their financial situation. It generally results in the customer not being able to complete all of the monthly payments over the term of the contract.

Making a deal for car finance

High-Pressure Sales Tactics

It’s also possible to make a claim if you feel that you were pressured into a PCP agreement that wasn’t right for you. This could have happened if the salesperson did not provide enough time to assess the deal or if there was no time available to look for an alternative PCP finance option. 

Inflated Prices And Overcharges In Interest

In many cases, the finance deal involves over-inflated interest charges that fund high commission pay-outs. In these cases, the dealership and finance company does not make it clear that the interest is high because of commission payouts. 

Emissions Scandal Claims

Many motor dealers and car manufacturers are being investigated for tampering with diesel emissions. In these cases, the customer enters into a PCP car finance agreement expecting certain emissions from the vehicle, which does not end up being the case. This is a matter of misrepresentation, and it provides grounds for claiming back on the finance deal.

How To Know If You’ve Been Mis-Sold Car Finance

If you feel like the car dealers failed to provide enough information around your credit agreement, then you may have been mis-sold car finance. Look through all your finance agreement information and carefully go over your correspondence with the salesperson. 

 

If any information was omitted during your correspondence or if there are any hidden or extra costs involved in the finance agreement, then you were likely a victim of mis-selling. If you feel like you have lost money or that your interest rate and fee basis is not what you expected, then it’s worth looking into the possibility of mis-sold car finance. 

 

It’s important to work with an experienced solicitor to help you identify mis-sold PCP cases and discover what you can make a claim for. 

How Much Is A Mis-Sold Car Finance Claim Worth?

The amount your mis-sold PCP claim is worth depends on several factors. These include:

  • how much finance you took out

  • what interest rates you were given

  • what commission model was used

  • how far along into repaying the loan you are 

 

The aim of a PCP car finance claim is to get repaid for the money you spent on inflated interest and hidden fees. While this differs from case to case, mis-sold car finance claim compensation usually covers hundreds, or thousands, of pounds.

Making A Mis-Sold Car Finance Claim

Start by talking to your finance provider and give them the chance to put the issue right. They have eight weeks to provide a final response to you. If the motor finance company does not offer a reasonable response, you can bring the complaint forward to the Financial Ombudsman Service (FOS).

 

For the claim, you will need details of the financial agreement, hire purchase agreements, and any other evidence that will support your claim. 

 

It’s best to make this claim by working with an experienced car finance solicitor. This will help you achieve a greater chance of a successful claims process and obtain greater commission payouts.

Car keys against white background

Contact Us Today To Get Started On Your Claim

If you want to deal with your PCP mis-selling claim more successfully, then you’ll need professional help. We can help you put together a strong case and identify exactly how much you will be able to claim back. 

 

If you have been a victim of mis-sold car financing, then get in touch with us today. We’ll make the process a lot easier and help you get back the money you have lost.

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