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We are a claims management company and receive payments from our partnered firms for our services. You do not need to use a claims management company to make your complaint to your lender or the Financial Ombudsman for free.
Car Finance Compensation Calculator
You could be owed compensation if your car finance was involved in Discretionary Commission Arrangements (DCAs), for which the FCA estimates that the average payout is around £950.
DCAs let dealers adjust your interest rate to boost their own commission - often without telling you. See how your DCA refund could be calculated.
Use our Claim Checker – quick eligibility check in minutes
No Win, No Fee
You are only charged after the claim has been won and you have your refund! The success fee is calculated as a percentage of the total compensation you receive. If our claims partner is not able to obtain an offer, you will not be charged. You can read more about fees here.
If you cancel your agreement or break your agreement before the end of the process, you may be charged a cancellation fee.
Was My Car Finance Mis-sold?
There are many reasons why a loan has been mis sold and a borrower may be eligible for a refund. This includes irresponsible lending or if there was a broker with certain commission arrangements.
If any of the below statements describe your experience with Car Finance, including personal contract purchase (PCP) contracts, you could be eligible to claim compensation.
The loan was unaffordable or the lender did not perform proper affordable ability checks - This can often be the case with subprime lenders like Moneybarn
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The broker used a Discretionary Commissions Arrangement (DCA), where they were paid more for putting you on a higher interest rate
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The car salesperson did not explain they would receive a commission (Hidden Commissions) on the sale of the car
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The lender/bank did not fully explain the commission
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The salesperson skipped through the car finance agreement Terms & Conditions
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You felt pressured into the finance deal and was not given a range of options including explaining all of the differences in each type of product
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The salesperson did not make it clear who was financially responsible for the repairs to the vehicle
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The salesperson did not offer the best interest rate available
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The salesperson did not present, with complete transparency, the interest rates charged for all loan options and how they may differ
Don’t worry if you can’t find the agreement or remember who the lender or dealership was. You just need the name of the company you made the payments to. You should be able to find this information on your old bank statements.
If any of the above statements apply to your experience, you could be eligible for a refund.
Martin Lewis
“£13 billion could be paid out over car mis-selling.” “This is enormous... we're talking about systematic, mass scale mis-selling” [1]
BBC
"Motorists who bought cars on finance could share in billions" [2]
MoneySavingExpert
“This could lead to billions of pounds of overcharged interest paid back to millions of people.” [3]
Car Finance Claims - What's Happening?
Like high-cost lenders, many car finance companies have been guilty of irresponsible lending. If your loan was unaffordable, you could be due a refund.
Reports have shown that the car finance industry is rife with these secret payments and hidden commissions, meaning you could have been mis-sold your car finance deal. The FCA estimates this could have cost consumers £300 million annually.
Discretionary Commission Arrangements (DCAs)
DCAs allowed brokers and dealers to inflate interest rates to increase their commissions.
Banned by the FCA in 2021 after an FCA investigation into Discretionary Commission Arrangements discovered widespread evidence of mis-selling.
It is estimated that 40% of all car finance deals included DCAs, potentially billions owed to customers.
The FCA estimates that the average payout is around £950; however, some other estimates are much higher.
2024 High Court Ruling On Hidden Commissions
On 25th October 2024, a high court judgement ruled that all commissions must be clearly disclosed, even fixed fees.
This opens up claims against many more lenders.
The ruling is currently under review by the Supreme Court.
How Widespread Is It?
FCA investigations found mis-selling across all finance types:
Personal Contract Purchase (PCP)
Hire Purchase (HP)
Contract Hire
The FCA is now looking into whether a compensation plan is necessary for addressing alleged large-scale mis-selling in the motor finance sector. The total redress is estimated to be between £9 billion and £18 billion in total. Based on an estimate of £950 per claim, it is likely that over 10 million finance agreements were affected.
The Financial Impact
The FCA estimates hundreds of thousands of motorists may have been affected.
Many customers were overcharged by £1,000 or more in interest to boost dealer commissions.
One dealer admitted:
“Frankly, we were getting away with murder. We weren’t treating customers fairly and were charging them to earn us money.”
The Industry’s Secret Payments
Hidden commissions have been common across the sector.
FCA estimates consumers lost £300 million every year due to these practices.
What’s Next?
FCA is considering a compensation scheme for large-scale mis-selling.
The Financial Ombudsman Service has already ruled in favour of complainants on hidden commissions.
Be aware, there are statutory deadlines, known as limitation periods, that apply to mis-selling claims.
FAQs
What types of car finance claims can I make?
You can potentially make a car finance claim for Unaffordable lending practices, if the broker was on a Discretionary Commission Arrangement or for Hidden Commissions. More information can be found in our post explaining the different types of car finance claims.
How long do Car Finance claims take?
The rules state that a lender has 8 weeks to reply to a complaint; however, sometimes they go over this deadline. If the lender concedes they were at fault, they will pay out shortly after. If the complaint needs to go to the Financial Ombudsman because the car finance lender is disputing it, the case could take anywhere between 12 to 18 months to conclude. Some people are lucky and get a claim accepted and their refund paid after only a couple of months. Others take over a year.
Lenders currently have an extension for hidden commissions claims, granted by the FCA, so these may take longer than usual.
How much could I get refunded from a car finance claim?
The compensation you may be entitled to depends on key factors, including the loan amount, interest rate, finance agreement date, and loan duration. The Financial Conduct Authority (FCA) highlighted in their report, "Our Work on Motor Finance – Final Findings" (March 2019), that a typical motor finance agreement of £10,000 under a Discretionary Commission Arrangement (DCA) could lead to consumers being overcharged by as much as £950 over a four-year period. As most people will have multiple car finance agreements, the average refund per claimant would likely be thousands.
How many people were affected by Hidden Commissions?
In terms of discretionary commission arrangements (DCA's) the FCA stated “On average, between 2007 and 2021, approximately three-quarters of all car finance had a DCA”.
In terms of hidden commissions in general, this would affect many more borrowers.
How do I know if I can claim?
Mis-selling often occurs when details of the agreement aren’t clearly explained or proper affordability checks aren’t conducted. In terms of car finance, it can also be because the broker was incentivised by DCAs. If any apply to you, you can file a complaint. Whether your agreement is ongoing or paid off, you can still claim. To find out if you can claim, click the Check button below.
Why Use The Claims Guide For My Claim?
Make It Easy - Claiming a refund can be a daunting task. Our partner claims that handlers make it easy and ensure everything you need is included, so you don't have to spend much time on it.
Professional - Each claim is different, and specific circumstances that are relevant to the claim should be explained by a professional. The Financial Ombudsman has previously been unable to progress some complaints that involved a “template” or “standard letter”.
How much will I receive if my Car Finance Claim is successful?
Compensation for a mis-sold car finance claim is generally aimed at covering the financial disadvantage caused by the mis-selling, particularly in cases involving Discretionary Commission Arrangements (DCAs). Compensation for loans with a DCA arrangement is based on the extra you paid compared to if you were given a more competitive rate, plus 8% statutory interest. The FCA estimates this will average £950 per claim. For more information and an estimate of the value of your claim, click here.
How much will I receive if my Unaffordable Lending Claim is successful?
If you successfully claim a refund from a lender, you can claim back the interest and charges on your loans, plus 8% statutory interest. For more information on how this is calculated, click here.
How much will I receive if my Hidden Commissions Claim is successful?
If you successfully claim a refund for hidden commissions, you can generally claim back the commission paid to the broker, plus, typically, 8% statutory interest. In some more serious cases, you may receive more. These circumstances are explained here.
How much will I be charged?
All claims on this website are on a no-win no no-fee basis, meaning you won't pay a thing unless you win compensation. You will have the right to cancel the agreement within 14 days with no penalty. If you cancel after 14 days, you may be charged for work done up until the time of cancellation.
We use multiple partners to ensure we are able to offer claims against all types of lenders, from whom we receive payments. The exact fee structure will depend on which lender you are claiming against, as this decides which of our partners is most suitable for your claim. A breakdown of our fee structure can be seen here. The fees for Diesel Emissions Claims are calculated differently due to it being a group action lawsuit.
How Do I Submit My Claim?
Simply complete the online application form by clicking on the blue button below. This is the first stage of your complaint to your lender, where you could receive compensation. For more information on the process, please click here.