A car finance claim involves compensation for a mis-sold car finance agreement. This could occur If the terms of agreement were not explained correctly —such as balloon payments, monthly instalments, and mileage restrictions were not fully explained or were unsuitable, also If a car dealer didn’t disclose their hidden commission, consumers can seek redress.

The claim amount is calculated as the difference between the interest rate you should have been charged and what you actually paid. Additionally, the Financial Ombudsman Service (FOS) awards 8% statutory interest on the overpayment. The average payout is around £1,600, but some cases reach up to £10,000. Since fair interest rates are often unclear, FCA guidelines play a crucial role in determining compensation.

You may be eligible if your car finance was mis-sold due to a lack of transparency, undisclosed commissions, or unfair interest rates. The lender or dealership must prove they acted legally.

Eligibility Criteria:

Finance type: PCP or HP agreements

Vehicle type: Cars, vans, trucks, motorcycles (new or used)

Agreement status: Active, completed, or even repossessed vehicles

Multiple claims: You can claim for more than one vehicle

If your finance agreement was mis-sold, you may be entitled to compensation.

You may be able to claim for mis-sold car finance if you bought a car or motor vehicle through PCP or HP finance between April 2007 and 28th January 2021, and the finance agreement was mis-sold.

Your car finance agreement may have been mis-sold if:

The car salesperson did not inform you that they would receive a commission from the lender for setting up the financial agreement

The car salesperson did not inform you of all the finance options available, including explaining the differences and responsibilities of each type of product

The car salesperson did not inform you, with complete transparency, of the interest rates charged for all finance options and how they may differ

The car salesperson did not offer the best interest rate available to you

The car salesperson did not adequately explain the details of the financial contract they sold to you, including the Terms and Conditions

The car salesperson did not conduct adequate affordability checks or talked you into an unaffordable finance agreement

The car salesperson used high-pressure sales tactics or did not give you adequate time to consider the agreement.

It’s the lender or car dealership’s responsibility to prove that they did all of these adequately. If they can’t prove they did all of them, you’ll be entitled to claim for mis-sold car finance