MANY drivers across the UK could be due thousands of pounds in compensation for mis-sold car finance.
The Financial Conduct Authority (FCA), the industry watchdog, is investigating the issue and is expected to release its findings in September.
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Find out if your car is eligible to make a claim with Finance Claims Expert
But, even before this date, you can still get your claim underway.
Below we explain the scandal and how you can check if you’re due compensation with with Finance Claims Expert.
What is the car finance mis-selling scandal?
Before it was banned by the FCA in January 2021, lenders were allowed to sell car finance to their customers on a “discretionary commission arrangement”.
This meant these firms could earn commission based on the interest rate sold to customers.
Often, a higher interest rate meant more commission, so there was an incentive to sell a more expensive loan.
So, many drivers were hit with expensive monthly repayments when they could have been offered a cheaper deal.
Thousands of drivers have since complained of their costly agreements prior to 2021 – before the ban came into effect.
In response, the FCA announced it was launching an investigation into the issue in January this year.
Many consumer champions, including Martin Lewis, have likened the move to the PPI scandal – an insurance based probe where companies were forced to pay billions of pounds in compensation.
Check if you are eligible for compensation
If you had a car finance between 2007 and 2021, either a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement, then you could be due compensation.
One of the easiest ways to check is by using Finance Claims Expert’s online calculator.
It takes less than 60 seconds to check and it’s completely free.
If you’re entitled to compensation, then you can use their legal services to make your case.
But if you want to make the case yourself, then you can use the calculator to find out how much you can claim.
The service is available to new and second-hand vehicles such as cars, vans, motorbikes, and motorhomes.
You also don’t need to still own the vehicle to qualify for compensation.
How much can I claim?
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Find out if your car is eligible to make a claim with Finance Claims Expert
On average, those who claim with Finance Claims Expert have been refunded over £5,300.
To date, the biggest claim they’ve successfully managed reached almost £10,500.
Ultimately, the amount you can claim varies on a case-by-case basis – but Finance Claims Expert estimates the scandal will pay out around £16 billion in total.
So far, the Financial Ombudsman Service (FOS) have published two landmark cases which sheds light on how these cases might be awarded compensation.
In both cases the claimants were awarded the difference between the lowest interest rate at the time and the rate they paid.
