Collective actions
Mis-sold car finance claims
Did you take out a car finance or PCP agreement before 28 Jan 2021? If so, you could be owed mis-sold car finance compensation. Speak to us about making a car finance claim today.
What are car finance claims?
In January 2021, the Financial Conduct Authority (FCA) launched a UK-wide investigation into a finance practice known as ‘discretionary commission arrangements’ (DCA). The practice was banned on 28th January 2021, but concerns were then raised that a substantial number of consumers could have been paying over the odds for their finance for years due to a DCA.
At Slater and Gordon, we’re working hard to ensure those who have been affected receive the compensation they deserve. To speak to a member of our specialist car finance claims team, get in touch today to find out how much you could be owed.
What is a discretionary commission arrangement?
Discretionary commission arrangements were commonly used in car finance agreements as a way of earning brokers and car dealers heft commissions if they were able to sell consumers agreements with high interest rates. Consumers themselves were often not informed that a DCA was included in their agreement, or that the interest rate they were being offered was not a fixed price.
Use of DCAs was widespread before they were banned, with as many as 40% of car finance deals before January 2021 affected. This means that thousands of car owners across the UK could have been mis-sold car finance.
Can I make a mis-sold car finance claim or a PCP claim?
It can be difficult to know if you’ve been mis-sold car finance, particularly if it’s been several years since you took out the contract. The FCA has said that you may have been affected by hidden commission if:
- You bought a car under a finance scheme (such as a hire purchase or personal contract purchase) before 28 January 2021
- You have become aware of a discretionary commission arrangement between your lender and broker
- You were not aware of the commission being made to the dealership at the time of purchase
- You were not made aware of the additional costs you could incur through your finance agreements, such as charges and damages
If you have been affected by any or all of the above, or you feel that you were pressured into taking out car finance with your dealership, you could be eligible to claim compensation for mis-sold car finance.
Am I eligible to make a car finance claim?
If you have taken out a car finance contract, such as a hire purchase (HP) or a personal contract purchase (PCP) agreement, before 28 January 2021, you could be eligible to make a car finance refund claim.
Currently, there is no firm indication of how far back the FCA investigation is going to go, as commission models such as DCAs were in use for many years before they were banned. However, it is a likely assumption that only contracts made after April 2007 will be considered, as this is the date the FCA took over the regulation of motor finance.
How do I make a car finance claim?
At Slater and Gordon, we’re working hard to ensure that everyone affected by the mis-sold car finance scandal has the opportunity to claim the compensation they deserve, without the headache.
We make the process straight-forward – simply enter your registration number to find out if you’re eligible. We’ll let you know whether you’ve been mis-sold car finance and begin negotiations for your refund with your lender.
Why choose Slater and Gordon Scotland?
Talk to the experts
We have teams of legal experts who specialise in pursuing group action against large corporations, championing the rights and welfare of individuals
Affordability and advice
We're able to offer affordable expert legal advice and can provide guidance on all aspects of group actions claims, giving you clear guidance on next steps
Tailored advice
We understand that every claim is different – so we are able to provide tailored advice and guidance to suit your individual needs.
Your local law firm
We are a national law firm, with legal experts available across Scotland. Meetings can be arranged via telephone or video call, to suit your requirements.
Frequently asked questions about car finance claims
How do I know if I’ve been mis-sold car finance?
If you’ve taken out car finance between April 2007 and January 2021, you could have been affected by the use of hidden commission. To check your eligibility, enter your details and we’ll let you know if you have a claim.
How much compensation could I be awarded for a car finance claim?
The amount of compensation you receive for your mis-sold car finance will be dependent on a number of different factors, including:
- The difference in the interest rate you should have been charged, and the one you ultimately were
- How long you’ve been making re-payments on your loan (as this will determine how much money you’ve put into the loan to date)
- The value of the loan you took out (the higher the value, the more interest you will have been charged)
For some, this could amount of thousands of pounds. It’s also worth remembering that if you’ve taken out multiple finance agreements before 28 January 2021, you could be eligible to make more than one claim – each claim is made on the basis of a singular agreement, not an individual, as each contract that is eligible could have been made with different lenders.
How long does a mis-sold car finance claim take?
The time it takes to finalise a mis-sold car claim can vary from case to case, as it will often depend on how quickly your car dealer or credit broker accepts they are responsible. If liability is accepted quickly, cases can be wrapped up within months. Where liability is disputed, this can take much longer.