The Court of Appeal ruling for the Mis-sold Car Finance was ruled out in October 2024. UK people who think they have or had mis-sold car finance agreements can claim the compensation. The eligible people can learn everything about the FCA investigation and compensation from here.
Mis-sold Car Finance Average Payout
The FCA started the investigation into mis-sold car finance in January and has found various evidence of the mis-selling of cars on all types of UK car finance. This implies the customers were not presented with all the information on the finance, which led to paying higher than required.
Based on the investigation and Court ruling, the people can claim compensation for the mis-sold car finance for any vehicle (new or used cars). According to the reports, the UK’s leading Solicitors have won the cases in this area, which led to a good amount of compensation for eligible UK people.
According to the FCA estimates, the customers who were impacted by the mis-sold car finance can reclaim £1000 to £16,00 as an average compensation. The reports suggest that consumers have paid more than £11,00 interest on their DCA-applied four-year car finance deal up to 10,000.
What’s the Mis-sold Car Finance case about?
The Financial Conduct Authority has prohibited car dealerships from earning commissions on the cars they sold on finance to customers in 2021. The decision was taken because to earn higher commissions the dealerships would use to offer higher-interest loans to the customers.
After the ban, the FCA received many complaints from customers that they were charged higher on their car finance. According to the reports, the Financial Ombudsman Service has received more than 10,000 complaints in this regard, where the complainers have claimed they were paid more in car finance arrangements made before 2021.
After such complaints, the FCA commences the investigation for the cases dated back to 2007, where the firms will pay compensation to the customers after the investigation is completed.
Who can receive the Mis-sold Car Finance compensation?
The UK people who meet the following requirements can claim the Mis-sold car finance compensation:
- When the salesperson has not told you all the information of your car finance agreement, provided poor advice, misled you, or does not notify you about the commissions they will earn through the car finance or the interest is charged in the finance.
- You can claim compensation for a car purchased via Personal Contact Purposes or Hire Purchase Agreement between 2007 and 2021. The Discretionary Commission Arrangement should apply to the Car finance agreement.
- You can receive compensation for all vehicle types purchased, such as vans, cars, motorcycles, trucks, etc.
- You can claim for multiple vehicles if you have purchased the car on finance.
- You can claim the compensation even for the active car finance agreements.
- You can even claim compensation for the car finance agreements that have been paid off and ended.
- Under the mis-sold car finance, you can claim the compensation even when your vehicle is repossessed by the bank when you can’t pay the interest and regular payments.
If you are still not sure if you are eligible for the compensation you can check several solicitors’ websites that have online tools for people to check if they are eligible for the compensation.
How to claim the Mis-sold Car Finance compensation?
The claiming process for the mis-sold car finance is pretty easy, you should directly contact the lender and claim the compensation or you can go to any solicitor to help you in completing the claim process. If the lender’s response to your direct claim is unsatisfactory, you can complain to the FOS.
The mis-sold car finance is filed against the banks or lenders. So far the FCA has ruled out the compensation favor where lenders are Black Horse, Lloyds Banking Group, and Barclays Finance.
Apart from these, the claims are still in progress against the following lenders:
- Blue Motor Finance
- CA Auto Finance
- FCE Bank PLC
- BMW Financial Service
- FirstRand Bank
- NIIB Group
- Clydesdale Financial Services
- Mercedes-Benz Financial Services
- PSA Finance
- Starline Motor Finance
- Vauxhall Finance
- Hyundai Capital
- Moneybarn No.1
- Toyota Financial Services
- Volkswagen Financial Services
When can you expect the Mis-sold car finance compensation?
According to the mis-sold car finance process, your complaint will be halted until 04 December 2025 if the lender has paid for the DCA on your agreement. The customers will receive the compensation only when the lender agrees to pay the compensation.
The lenders will respond about the claim in 8 weeks on paying the compensation or not. So, according to the firms, it can take 8 to 12 weeks to submit a formal complaint about the mis-spelling car finance and get a response from the lender.
The FCA investigation is still ongoing, so it may take time. It is reported the FAC will lay out the next plan in May 2025 to ensure the customers receive compensation because the regulators have instructed the lenders to not respond to any claims until December 2025.
People who think they are eligible for the mis-sold car finance compensation should claim the compensation from the lenders directly quickly because who knows the FCA would instruct the lenders to respond to the claim or announce a formal redressal scheme for this misleading activity done by the car dealerships.
Eligible people should claim the mis-sold car finance claims without waiting for May 2025 as it will be easier in the longer run if you have claimed earlier to receive the compensation.