Were you mis-sold car finance?
You could be one of 12 million people owed a substantial payout, says Paul Lewis.
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Did you buy a car, motorbike or small van between 6 April 2007 and 1 November 2024? Did the firm you bought it from arrange the loan for you? If so, you were probably mis-sold the finance and could be in line for compensation. The amount paid will average £829 for each agreement you took out during that period – all you have to do is complain to the lender which provided the loan. If you have not already complained do that as soon as you can, preferably before 30 June. That will ensure your complaint is dealt with swiftly under the rules the Financial Conduct Authority (FCA) set out on 30 March.
Over the last couple of years it has been hard to avoid adverts by firms promising to claim compensation for mis-sold motor finance. But they normally take 30% plus VAT of any redress you get. The FCA scheme is designed to ensure that customers who were mis-sold can make the claim themselves, at no cost, without using a solicitor or a claims management firm.
It says around 12 million motor finance deals were mis-sold between April 2007 and November 2024. The mis-selling occurred when commission was high and kept secret. To pay that commission, interest rates were higher than they should have been. Those higher interest rates meant millions of customers overpaid.
If you bought a vehicle in that period on a personal contract or hire purchase deal, address your complaint to the firm which arranged the loan (mention the scheme set out by the FCA on 30 March 2026). Say what vehicle you bought, when and where, and that you believe the loan was mis-sold to you for one or more of these reasons:
- The broker who arranged the deal adjusted the interest rates to boost their commission
- The commission was very high and not fully disclosed
- The car dealer gave the lender exclusive rights to arrange the finance.
If paperwork is lost and you cannot remember the details, put your best estimates in. If your complaint is made before 30 June you should hear back later this year with an offer of redress.
For more information, and standard letters, see moneysavingexpert.com and which.co.uk.