Car Finance Claim Frequently Asked Questions
The Financial Conduct Authority found that 95% of dealers / brokers receive commission from the lender for putting you on their finance / PCP. As they are incentivised to recommend this finance and as there may be better and cheaper ways for you to fund the purchase, they have an obligation to inform you. We have found that the vast majority did not tell the customer that they were receiving commission and therefore they have been mis-sold. The courts take hidden / secret commission as a bribe and “special form of fraud”.
You could have been mis-sold for any of the following reasons:
You were not made aware that the broker / dealer would be paid commission by the lender
You were not made aware of the amount of commission paid to the dealer / broker
You were was not made properly aware that you would not own the vehicle at the end of the contract
You were not made aware that you would still owe a significant amount to purchase the car
You were not provided with any other options in which you could purchase the car
You now believe that the interest that you paid was much higher than other options you could have had
This depends on a number of factors, including how much interest you paid, how much you paid in fees and how much commission was paid to the dealer / broker. We will be relying on a Court of Appeal claim to try to recover all of those fees and this will mean an average initial claim of almost £6,000. Whilst we stress we cannot guarantee recovery of the full amount, we will do everything we can to get a favourable settlement. In the very least we expect that if hidden / secret commission is found then the amount of this commission should be recoverable, which would be an average claim of between £1,000 – £1,500. We are of course hopeful and confident that we can recover more than this.
This depends on a number of factors, including how much interest you paid, how much you paid in fees and how much commission was paid to the dealer / broker. We will be relying on a Court of Appeal claim to try to recover all of those fees and this will mean an average initial claim of almost £6,000. Whilst we stress we cannot guarantee recovery of the full amount, we will do everything we can to get a favourable settlement. In the very least we expect that if hidden / secret commission is found then the amount of this commission should be recoverable, which would be an average claim of between £1,000 – £1,500. We are of course hopeful and confident that we can recover more than this.
As this is a relatively new market and as the FCA have only recently found the widespread hidden commissions, we cannot give a definitive time in which your claim will be settled. Nevertheless, we will do everything we can to recover a favourable settlement as quickly as possible and we do have strong justification given the Court of Appeal confirmation of the Courts stance on hidden / secret commissions. With this we will be striving for an average claim to be settled within 12 months. However, we must warn for your expectations, if we do get a particularly difficult lender and your claim does require the necessity of a Court hearing this could drag the claim up to 48 months.
The most widespread mis-selling appears to be on vehicle loans arranged by the dealer / broker, PCP (Personal Contract Purchase), HP (Hire Purchase) and lease purchase. We will be able to look into all of these types of finance agreement.
We will not be able to help if you simply took out a personal loan to buy a vehicle (not arranged by a dealer / broker) or the car was just leased with no intent / option to purchase.
The broker / dealer had an obligation to tell you that they were earning commission for recommending the finance. The fact that they hidden the commission is mis-selling. It has been admitted by a car dealer that they were “getting away with murder” and “in effect charging them to earn us money”. You may have been able to get much cheaper finance had the dealer been working in your best interests and what more in 42% of these finance models the dealer could put you on a higher interest rate, just to get themselves a higher commission. It is entirely up to you whether you would like to pursue a claim. In our view, this needs putting right and they should not have been rewarded for deceptive and underhand behaviours.
Yes, you can certainly claim yourself direct to the lender and it is free of charge for you to do so. It is also free of charge to take your claim to the Financial Ombudsman Service (FOS).
Whilst you can claim direct yourself, our recommendation is to use an expert. Unlike in many other financial mis-selling areas, this is an infant market and we believe that the best chance of success is to have an expert legal representative fighting on your behalf. This does cost you a proportion of your compensation (30% + VAT) but in our view this offers very good value and is in fact much cheaper than the majority of other services on the market. It is entirely your decision though, you are free to choose.
If you lose your claim then you will not receive any compensation and as this is a No Win, No Fee agreement, then providing that you upheld your reasonable commitments and did not knowingly mislead in any way, you will not have to pay any costs.
Yes, you can make a claim for any finance agreements that you think may have been mis-sold between 2008 and 2020. Simply fill in a separate Letter of Authority for each agreement.
Don’t worry if you don’t have the documents immediately to hand. Whilst we will need the finance agreement to proceed with your claim these are generally very easy to obtain from the lender. A 5-10 minute phone call where you ask to receive an electronic version of your finance agreement is all that is needed. We have a list of all lender phone numbers here. If you are unsure who the lender was you can check past bank details or contact the dealer where you bought the car to see which finance company they were using at the time.
No, this does not matter. We can still proceed with these type of claims and it will not negatively affect your position.
Unfortunately not unless it is a lease purchase. The mis-selling is for the finance part of the agreement and if the vehicle was a straight lease, then we are not aware that this will be relevant under the mis-selling issues of hidden commission that we are pursuing.
No, the pursuing of your claim will not affect your rights to the vehicle and therefore you will not have to give the vehicle back, just because we are making the claim.
We are relying on the Court of Appeal cases of Wood-v-Commercial First Business and Business Mortgage Finance v Pengelly. We have a dedicated page explaining these claims if you would like to click here.
No, generally there will be no necessity for you to personally have to attend court, although there may be a necessity for us to take your actual claim to court.
SortMyCash are here to help consumers with all things financial, everything from insurance, utilities, mortgage and consumer protection. We have spent years searching for the very best partner for each area so that you no longer need to trawl reviews for hours on end. We believe using our partners Chan Neill Solicitors is the best way to proceed with these type of claims given that it is such an infant market. However, you are always free to choose.
