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Mis-Sold Car Finance Claims

Have you bought a new or used car using finance in the last ten years? If you have, that finance agreement may have been mis-sold to you, and you may be able to claim hundreds, if not thousands of pounds in compensation.

Contact us today, and we'll check your car finance agreement and tell you how much you may be able to claim in compensation.

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What Is Mis-sold Car Finance?

You may have been a victim of mis-sold motor car finance if you received poor advice on your financing options or if you were not sufficiently made aware of the various commissions being charged within your agreement.

A recent Financial Conduct Authority (FCA) investigation discovered widespread evidence of mis-selling on all types of vehicle financing options.

Unknown to customers buying vehicles, lenders systematically incentivised brokers and car dealers to charge their customers higher interest rates so they could receive higher commissions themselves.

Unknown to customers buying vehicles, lenders systematically incentivised brokers and car dealers to charge their customers higher interest rates so they could receive higher commissions themselves.

As one car dealer openly admits in a recent article, “frankly, we were getting away with murder. We weren’t treating customers fairly and were, in effect, charging them to earn us money.”

Another dealer said their agreements with their lenders “let us car salesman adjust the interest rate on customer loans in order to boost our commission.

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Depending on the value of the deal and the APR we were able to get away with, this commission – after the dealership had taken its cut – could equal what we earned on the sale of the car itself.

Our customers knew none of this, of course. They assumed that our frantic tappings (on our keyboards) were an effort to secure them the most favourable lending terms.”

It is estimated that hundreds of thousands of motorists might have been mis-sold finance packages, costing consumers up to £300m a year.

What makes these cases stand out is that the perpetrators knew full well that they were misguiding trusting customers for their own financial gain.

— Coby Benson, Bott and Co Solicitor

Mis-selling was discovered on all motor vehicle types, including new and used cars and vans under all vehicle financing options such as personal contract hire (PCP), hire purchase (HP), Contract hire or a car loan.

As the UK’s leading consumer law firm with an extensive track record of success, we are your preferred legal partner in reclaiming compensation on your behalf.

Find out today if you have been the victim of undisclosed commission payments between brokers and lenders when using finance to purchase a new or used vehicle.

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Find Out If You Have You Been A Victim Of Car Dealers Setting Secret Commissions

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How Much Could I Claim For Being Mis-Sold Car Finance?

It is estimated that the average amount of compensation for a mis-sold car finance compensation claim is around £1,100. In some cases, the amounts can be considerably higher.

The exact amount you may be able to claim will be dependent on several factors. These include;

  • The size of the loan. The larger the loan, the more you'll be able to claim.
  • How long ago you signed up for the loan. The longer the loan period, the more you'll be able to claim.
  • What interest rate you were quoted, and how much difference there is between the rate quoted and the rate you should have been quoted.

Amounts are similar for all types of motor vehicles, including vans, trucks, 4X4s.

In some circumstances, we may be able to claim back the optional extras you may have added to your agreement, such as insurance, tax, maintenance, breakdown cover, and servicing.

How Do I Know If I Have Been Mis-sold A Car Finance Loan?

You can claim for any mis-sold car finance agreement that you may have entered into in the last ten years.

We will be able to review your agreement and tell you instantly if you have been mis-sold and if commissions have been unfairly manipulated. We will let you know how much you may be able to claim if we see evidence of this in your agreement.

Don’t worry if you can’t find the agreement or remember who the lender or dealership was. We can find your agreement on just the name of the company you made the payments to. You should be able to find this information on your old bank statements.

Additionally, car finance companies must keep all contractual agreements with their customers for at least the last six years.

The burden of proof is on the lender to show that they acted legally in all aspects of the process.

How Do I Know If I Can Make A Claim?

You may be entitled to claim compensation for mis-sold car finance if the answer is no to any one of the following

It’s the company’s responsibility you purchased your vehicle from to show that they did all of the following adequately. If they can’t prove they did all of them, you’ll be entitled to claim compensation.

  • Did the salesperson adequately explain the finance deal they sold to you?
  • Did the salesperson present to you all of the finance options available, including explaining all of the differences in each type of product?
  • Did the salesperson present to you, with complete transparency, the interest rates charged for all loan options and how they may differ?
  • Did the salesperson offer the best interest rate available to you?
  • Did the salesperson talk you into a financial package that was unaffordable?
  • Did the salesperson make it clear who was financially responsible for the repairs to the vehicle?

Even if you are unsure about any of these questions, we will still be able to review your agreements and let you know if you can claim.

How Do I Start My Claim?

Just complete our short form, providing the details of your loan agreements. We will be able to process your claim quicker the more information you can provide to us.

You can claim for any loan you were sold to purchase a vehicle in the last ten years, so you can upload as many agreements as you like.

We will then contact the lenders on your behalf and negotiate the amount of compensation you’ll be able to claim.

Our services are offered on a No Win No Fee basis, meaning you’ll at no financial risk to claim.

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Find Out If You Have You Been A Victim Of Car Dealers Setting Secret Commissions

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3 Examples of Mis-sold Car Finance Cases We Are Handling

PCP Mis-selling

Mr D entered into a PCP agreement to buy a Kia Sportage in 2015. The car’s cash price was £11,950, but the total amount payable under the PCP finance agreement was more than £16,000.

Unknown to Mr D, the dealer who sold him the car received a commission payment of almost £1,800 from the finance company.

The method of calculating the commission in Mr D’s case was directly linked to the interest rate he paid, meaning the dealer had an incentive to increase the interest rate to receive a higher commission payment himself.

The lender set a range of interest rates between 5% to 10%, within which the dealer could effectively charge Mr D what they liked. Although they were willing to charge Mr D as little as 5%, they charged him almost 7%.

Mr D instructed us to pursue a claim to recover the undisclosed commission and the additional interest he paid above what he would have paid at the minimum interest rate permitted.

We have issued Court proceedings to seek to recover the above sums totalling around £4,000.

Hire Purchase Mis-selling

Mr C entered into a Hire Purchase agreement to buy a BMW in 2018 for just under £15,000. With an interest rate of 15% and the dealer’s additional charges, the total amount that Mr C would need to repay came to more than £25,000.

As part of the agreement between the dealer and the finance company, the dealer was entitled to a fixed commission of 10% of the cash price of the vehicle – almost £1,500 in Mr C’s case.

Although Mr C was told that some commission would be paid, he was not advised that he would be paying an additional 10% of the cost of his car to cover this.

Mr C instructed us to pursue a claim to recover the undisclosed commission he has paid as part of buying his car, along with interest on this since the start of his agreement.

We are preparing to issue Court proceedings to seek to recover sums totalling around £2,000.

Hire Purchase Mis-selling

Mr M entered into a Hire Purchase (HP) agreement to buy a Vauxhall Corsa in 2015. The cash price of the vehicle came to just under £8,500.

However, over the 5-year agreement, Mr M paid almost £3,400 in interest. When added to the dealer’s other charges, the total amount that Mr M repaid came to more than £12,000.

The dealer earned a commission of over £500 for this transaction – around 6% of the price of Mr M’s car.

Although Mr M was told that some commission may be paid, he was not told how much this would be. Previous Court cases have established that simply telling a customer that a commission might be paid is not good enough. The dealer should have told Mr M that a commission would be paid and exactly how much commission they would earn so that he could agree to this.

Mr M instructed us to pursue a claim to recover the undisclosed commission he has paid as part of buying his car, along with interest on this since the start of his agreement, totalling more than £700.

Why Should I Use Bott and Co For My Claim?

With over 20 years of successfully helping people reclaim what is rightfully yours, Bott and Co are the leading consumer law firm in the UK.

We specialise in these “David Vs Goliath” legal battles, with a proven track record of success, most notably shaping the law for airline passenger rights to claim for compensation when airlines are at fault for flights that have been delayed or cancelled.

We have unmatched experience and expertise in these types of legal disputes.

We expect the motor industry will be unlikely to pay compensation unless legal action is taken. There’s no-one better equipped to fight for you when that happens than Bott and Co.

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Find Out If You Have You Been A Victim Of Car Dealers Setting Secret Commissions

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How Do We Know Mis-Selling Has Been Taking Place In Car Dealerships Across The UK?

The FCA sent mystery shoppers to 122 car retailers throughout the UK to discover:

  • Out of the 112 retailers, only 11 told their customers that the dealership might receive a commission for arranging the deal.
  • Only 31% of brokers explained to PCP customers they do not own the car until all sums (including a balloon payment) have been paid.
  • Just 28% of brokers disclosed the total amount payable and explained the consequences of a missed payment or withdrawal from an agreement.
  • On a typical motor finance agreement of £10,000, a customer may have been charged £1,100 more in interest through a PCP than through a different financing plan.

Jonathan Davidson, director of supervision for retail and authorisations at the FCA, said the actions discovered were unacceptable.

“Some motor dealers are overcharging unsuspecting customers over £1000 in interest charges in order to obtain bigger commission payouts for themselves.”

Find Out If You Can Claim

Find Out If You Have You Been A Victim Of Car Dealers Setting Secret Commissions

UPLOAD YOUR AGREEMENT NOW