What Is A HP Finance Claim?
You may have a legal right to make a HP claim if you think you were mis-sold car finance through a hire purchase contract finance agreement when purchasing your vehicle.
Mis-selling of your HP car finance agreement may have occurred if the salesperson failed to give you all of the necessary information about your agreement, misled you, provided poor advice, or did not disclose any commissions or interest being charged as part of the agreement.
A recent Financial Conduct Authority (FCA) investigation discovered widespread evidence of car finance mis-selling on all types of UK car finance agreements, including hire purchase agreements, and estimate that as much as 40% of these agreements may have been mis-sold.
Find Your Car Finance Agreements For Free
Just add a few details and we can validate any car finance agreement you may have had going all the way back to 2007.
We'll then tell you if you can claim and how much you might receive.
START INSTANT CLAIM CHECKWhen Can I Claim For A Hire Purchase (HP) Refund?
You may be able to claim for mis-sold HP finance if the salesperson failed to present all finance options, adequately explain the details of your hire purchase finance agreement and the interest rates charged, make affordability checks or inform you if they would receive a commission.
The burden of proof is on the lender or the car dealership to show that they acted legally in all aspects of the process. You may be entitled to reclaim money for your HP car finance agreement if this cannot be proven.
Mis-sold hire purchase claims can be made in the following instances:
- You can claim for all types of vehicles, including cars, vans, trucks, and motorcycles
- You can claim for both new or second-hand vehicles purchased through finance
- Claims can be made for agreements that are still active, and payments are being made
- Claims can be made for agreements that have ended, and the vehicle has been paid off
- You can claim for multiple vehicles at the same time
- You can claim even if the vehicle was repossessed.
Additionally, the vehicle must be primarily for personal use, not business use.
Claim For Mis-sold Car Finance With Bott and Co
How Can I Check If I Have A Mis-sold HP Car Finance Claim?
You may be able to claim compensation for your HP finance agreement if you bought a car or motor vehicle through hire purchase between April 2007 and 28th January 2021, and the finance agreement was mis-sold.
Your HP agreement may have been mis-sold if:
- The car salesperson did not inform you 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, including the Terms and Conditions they sold you
- 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 make a HP claim.
Why Choose Bott and Co?
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A History of Success
Successful in over 90% of Mis-sold car finance claims
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£1,000*
Potentially Claim Over
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On Your Side
We are the only firm taking lenders to court and winning
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Fully Regulated
We are members of the Solicitors Regulation Authority. Your claim is in safe hands
How Much Money Could I Reclaim For Mis-sold HP Agreements?
The exact amount of compensation you could claim for a mis-sold HP agreement will depend on several factors.
- The level of compensation you may be able to reclaim is based on several factors, including:
- The size of the car finance loan – generally, the larger the loan, the more you’ll be owed and able to claim back
- The length of your car finance agreement – you’ll be owed more if you’ve been paying the loan for longer
- The interest rate you paid and the difference between the rate quoted and the rate you should have been offered
- In addition, the Financial Ombudsman Service awards a further 8% interest on the value of the overpayment
However, this is difficult in most cases as you will not know the interest rate you should have been charged. This is why the FCA’s ruling on the amount of compensation you may be due is so important.
What Is The Average Payout For A HP Claim?
Representing thousands of clients, we have successfully won over 90% of mis-sold car finance claims, including many HP finance claims, that have gone to trial since January 2022. The average compensation payout for a HP claim is £1,100.
HP Claims Calculator – Check Your HP Car Finance Refund
Our calculator below estimates the size of a refund you may receive when making a HP claim.
Add the value of your vehicle, the number of years of your agreement, and the interest rate you paid. Then, compare this against a rate you may have been offered if you weren’t mis-sold.
Mis-sold Car Finance Claims Calculator
You may have overpaid:
£ 0.00
in interest over 5 years
Please note that this calculator only provides a rudimentary calculation of how much extra interest has been paid on a Hire Purchase agreement.
The calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim. If in doubt please take legal advice from a firm with suitable expertise, such as Bott and Co.
What Types Of Mis-selling Can I Make A HP Compensation Claim For?
From the thousands of HP claims clients we have represented, the most common types of mis-selling are:
- Hidden Discretionary Commission Arrangements
- Inflating Interest Rates To Get More Commission
- Not Explaining All Financing Options To The Customer
- Not Disclosing Who Owns The Car At The End Of The Agreement
- Not Carrying Out Affordability Checks
What Are Discretionary Commission Arrangements In Hire Purchase Finance Agreements?
Discretionary commission arrangements, sometimes known as DCAs, were a commission model that allowed lenders to authorise brokers to adjust the interest rates they offered customers for HP car finance agreements.
The broker was incentivised to increase their commissions by charging the customer a higher interest rate than necessary. The Financial Conduct Authority (FCA) banned DCAs in January 2021.
Which Car Makers Can I Make A HP Finance Claim Against?
Many mis-sold HP claims will be against the banks or lenders who have agreements with the car makers.
However, if you think you have a right to claim, you can claim against any car maker. We have ongoing litigation or have settled cases against well-known car companies such as Audi, BMW, Hyundai, Kia, Mercedes Benz, Toyota, Vauxhall, and Volkswagen.
Which Lenders Can I Make A HP Claim Against?
We have hire purchase HP finance claims in progress against a large number of lenders, including:
How Far Back Can I Make A HP Finance Claim?
You have up to six years from the date of the agreement or three years from when you became aware that you had cause to raise a complaint.
Reclaim HP Car Finance With Bott and Co Solicitors
As the UK’s leading solicitors in mis-sold car finance claims, we have won several significant cases, including the pivotal test case of Mrs Young vs Black Horse, which has opened the doors to thousands of people reclaiming compensation for mis-sold HP agreements.
We have spent millions in litigation, representing the rights of car finance consumers, and have won numerous test cases that have set a precedent for everyone who may have been mis-sold to have the right to claim, whether Bott and Co. represent them or not.
How Do We Know PCP Mis-Selling Took Place?
In 2021, a Financial Conduct Authority (FCA) investigation discovered widespread mis-selling of car finance agreements.
As part of the investigation, the FCA sent mystery shoppers to 122 car retailers throughout the UK to discover:
- Of the 122 retailers, only 11 told their customers the dealership might receive a commission for arranging the deal
- Only 31% of brokers explained to PCP finance customers that 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 agreement than through a different financing plan.
As a result of the investigation, the FCA banned commissions linked to car finance in June 2021. The FCA estimates the move will save consumers around £165 million a year.
Frequently Asked Questions
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Yes, you can make a claim for each separate agreement you entered where you think you may have been mis-sold.
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You can only claim for vehicles primarily for personal reasons; however, commuting does count as personal use.
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Yes, you can also claim for mis-sold car finance for used cars. You can claim as long as you entered into a finance agreement to purchase your vehicle, and we can prove you were mis-sold.
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While the car finance mis-selling scandal has previously only related to ‘discretionary commission arrangements, the recent Court of Appeal case of Johnson v Close Brothers suggests that consumers with leases can also claim.
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Unfortunately, we cannot claim on your behalf in this instance.
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You can make a mis-sold car finance claim if the finance agreement is still active or has already been paid off. We can check and validate any agreement for you if you have paid something for it within the last six years.
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No, making a mis-sold car finance claim will not negatively affect your credit score. Your claim is in relation to how the agreement was sold to you, not whether you’ve made your payments.
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You can still make a claim. In fact, almost of our clients come to us without any previous paperwork. Just add your details to our mis-sold car finance claim checker and we’ll validate all your agreements for you. Alternatively, Consumers can indeed try it for themselves first and in fact Bott and Co offer a free template letter.
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You can still make a claim. We have tools, such as our car finance claim agreement finder which can locate your finance details without you needing to remember your registration number, agreement number, or the name of your lender.
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Yes, you can still claim. We have built a free mis-sold motor finance claims checker that will search your credit record for any motor finance agreements you’ve had in the past six years.
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If the lender has gone bust, you can no longer claim against them. However, you may still be able to claim from the dealer or broker that arranged the finance for you. Our specialist lawyers can advise you further on this.
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If you have submitted your letter of complaint directly to the lender under the DISP rules (Dispute Resolution Complaints), the lender has up to eight weeks to respond.
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No, lenders cannot blacklist you or treat you any worse as a result of making a complaint.
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Bott and Co represented Mr Johnson in this case. The decision is important because based on the ruling, the FCA has announced that their consultation should extend to all types of commission arrangements. Previously the scope related only to discretionary commission arrangements. This broader view extends to the consultation to all arrangements, potentially vastly increasing the number of people who may have a right to claim.
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Yes, the recent Court of Appeal decisions affects all motor finance agreements where commission has been paid, regardless of how that commission was calculated. It’s therefore likely that all claims will be paused (and therefore delayed further) pending an answer from the Supreme Court.
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If the lender has rejected your complaint, then it has been closed by them and will not be re-opened without further input. It would therefore be advisable to submit the complaint again.
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Bott and Co Solicitors provide specialist legal support for motor finance claims. Our dedicated team manages claims professionally and transparently, keeps clients informed at every stage and helps avoid common issues associated with multiple representatives.
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Email motorfinanceclaims@bottonline.co.uk who aim to respond within 1 working day
In your email, include:
Your full name
Your claim reference number (if you have it)
Please also be aware there is an FCA “complaints pause” in place until 31 May 2026, which means lenders are not yet giving final responses on motor finance complaints. This can make everything feel very slow, even when work is happening in the background.
Find Your Car Finance Agreements For Free
Just add a few details and we can validate any car finance agreement you may have had going all the way back to 2007.
We'll then tell you if you can claim and how much you might receive.
START INSTANT CLAIM CHECK