Car Finance Claims: Were You Mis-Sold a Deal?

TL;DR

• The Problem: Hidden commissions, inflated interest rates, or unclear PCP/HP agreements mean thousands of drivers could have been mis-sold car finance.

• The DIY Option: You can make a claim yourself, without lawyers, using guidance from MoneySavingExpert and the Financial Ombudsman Service.

• Extra Support: Specialist services like ClaimForCars.com handle the paperwork and chasing for you — though they typically take a cut of any payout.

Why Mis-Sold Car Finance Is Still a Big Issue

If you’ve financed a car in the last decade, whether via Personal Contract Purchase (PCP) or Hire Purchase (HP), there’s a chance your deal wasn’t entirely fair. While car finance is meant to make driving affordable, some dealerships and lenders have quietly profited from hidden commissions, unfair interest rates, and misleading sales practices.

The Financial Conduct Authority (FCA) has been investigating these practices for years. Their findings show thousands of drivers were unknowingly paying extra, while dealerships pocketed secret bonuses for each deal sold. In many cases, consumers were never told the full details or offered a fair alternative.

Common mis-selling scenarios include:

• Hidden commissions: Dealerships receive payments from lenders, which aren’t disclosed to the buyer.

• Inflated interest rates: Rates are higher than comparable products on the market.

• Lack of explanation of risks: Balloon payments, excess mileage fees, or early termination charges were not explained.

• Pressure to sign: Sales tactics left consumers feeling rushed or forced into a deal they didn’t understand.

For thousands of drivers, discovering these issues means compensation could be due, often amounting to hundreds or even thousands of pounds per agreement.

How to Spot a Mis-Sold Finance Deal

Even if you’ve been driving your car for years, there are clear signs that your finance might have been mis-sold. Here’s what to look for:

1. Unexplained Terms or Fees – Did your contract include charges or balloon payments you didn’t understand?

2. Dealer Incentives Hidden from You – Ask whether the dealer received bonuses or commissions.

3. Interest Rates Higher Than Standard – Compare your APR with other deals at the time.

4. No Options Offered – Were you given a choice between HP, PCP, or personal loans?

If any of these apply, it’s worth investigating further. Citizens Advice provides free guidance on checking whether your finance agreement was fair: Citizens Advice – Consumer Rights.

Step-by-Step Guide to Making a Claim Yourself

You don’t need a solicitor or “no win, no fee” claims site to reclaim mis-sold car finance. Here’s a practical approach to making a DIY claim:

Step 1: Collect Your Documents

Start with the paperwork:

• Finance agreement (PCP or HP)

• Any dealer correspondence

• Bank statements showing payments

These documents are essential for proving mis-selling.

Step 2: Contact Your Finance Provider

Write a clear complaint letter:

• Explain what you believe was unfair

• Reference specific parts of your contract

• Include supporting documents

• Keep copies of everything

Tip: Keep the tone factual, polite, and professional — this helps your claim be taken seriously.

Step 3: Escalate to the Financial Ombudsman

If your provider rejects the claim or doesn’t respond within eight weeks, you can escalate to the Financial Ombudsman Service (FOS). They’re independent, free, and can make legally binding decisions.

Useful link: Financial Ombudsman Service – Car Finance Complaints

Real-Life Examples

• Case 1: A driver was sold a PCP agreement with a 6% APR, while comparable deals at the time were 3.9%. After a DIY complaint and escalation to the Ombudsman, they received £1,200 in compensation.

• Case 2: Another consumer was never told the dealer received a £400 commission on their HP agreement. Filing a complaint themselves led to full reimbursement of the hidden fee.

These examples show that DIY claims are entirely possible — you just need persistence and proper guidance.

When Using a Claims Service Makes Sense

Not everyone has the time, patience, or confidence to run a claim themselves. Services like ClaimForCars.com can:

• Handle all correspondence with lenders

• Assess your case professionally

• Maximise your chance of success
  
  

The trade-off: They typically take a percentage of the payout. For some, that convenience is worth it; for others, going DIY keeps 100% of your compensation.

Extra Tips for a Successful Claim

1. Keep Records of Everything – Emails, letters, and call logs can strengthen your case.

2. Be Patient – Claims can take weeks or even months to process.

3. Know Your Rights – FCA and Ombudsman rules are on your side if the agreement was mis-sold.

4. Use Free Templates – Martin Lewis’ MoneySavingExpert offers letter templates to simplify DIY claims: MoneySavingExpert Mis-Sold Finance Guides.

FAQs

Q: Can I claim for multiple cars?
Yes. Each agreement is treated separately, so you can submit multiple claims if applicable.

Q: What if the finance company denies my complaint?
Escalate to the Financial Ombudsman. They have the power to overrule the lender.

Q: Is there a time limit for claiming?
Most claims relate to agreements in the last 10–15 years, but check with the FCA and Ombudsman for specific rules.

Conclusion

Mis-sold car finance claims are still a huge issue in the UK, affecting thousands of drivers each year. Whether you go DIY, using guidance from MoneySavingExpert and the FOS, or enlist a specialist like ClaimForCars.com and Reclaim247, the key is to act promptly.

Even small amounts of hidden commission or slightly inflated interest can mean hundreds or thousands owed back to you. Don’t let complex paperwork or fear of confrontation stop you from reclaiming what’s rightfully yours.

Related Articles:

• Claim Mis-Sold Car Finance

• Common Car Finance Mis-Selling Tricks

• What To Do If Your Car Finance Is Mis-Sold

• Mistakes to Avoid When Claiming Mis-Sold Car Finance

• DIY vs Using ClaimForCars.com for Mis-Sold Finance

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