Car finance mis-selling happens when customers are not given full or clear information about car finance deals—especially about how interest rates are decided. In the UK, many people have discovered they were charged more because of secret commission deals. If this happened to you, you may be entitled to compensation. Learn what caused these complaints, how to spot if you’ve been mis-sold, and how to start your claim today.
What Is Car Finance Mis-Selling?
Car finance mis-selling is when a customer is sold a car finance agreement under unfair or misleading circumstances. This often happens with Personal Contract Purchase (PCP) agreements, where customers are unaware of hidden commissions or are given poor explanations about terms and interest rates.
In many cases, salespeople or dealers earned higher commissions for charging customers higher interest rates—without telling them. This created a conflict of interest and led to thousands of people overpaying for their car finance deals.
In 2021, the Financial Conduct Authority (FCA) banned this type of discretionary commission arrangement, but many people are still stuck with mis-sold finance agreements signed before the ban came into effect. As a result, complaints are rising fast.
Can I claim compensation for mis-sold car finance in the UK?
Yes. If you took out a car finance agreement between 2007 and 2021 and believe you were misled, you can file a claim. Compensation may include the extra interest you paid and in some cases, you could receive thousands of pounds.
Is there a deadline to claim for mis-sold car finance?
There’s currently no official deadline, but the FCA is investigating and a potential mass compensation scheme may emerge. It’s best to start your claim as soon as possible to avoid missing out.
Who can help me file a mis-sold car finance claim?
Legal firms and claims management companies like National Claims can help connect you with experienced solicitors who understand how to handle mis-sold car finance cases effectively.
Why Are People Complaining About Car Finance Mis-Selling?
The rise in complaints mainly comes down to lack of transparency. Before the FCA ban in 2021, dealers could set interest rates on PCP and HP (Hire Purchase) deals and earn more commission when they charged you more.
Most customers never realised this. They assumed finance deals were fair and regulated—when in reality, the system worked against them. A report from the FCA found that customers paid £300 million more than they should have each year due to these commission models.
These practices have led to thousands of formal complaints and a growing number of claims, with some experts comparing it to PPI mis-selling in scale and impact.
What Are the Signs You Were Mis-Sold?
You might be eligible to make a claim if any of these apply:
- You weren’t told a commission was being paid to the broker or dealer.
- The finance provider didn’t explain the agreement properly.
- You were pushed into a PCP or HP deal without being shown alternatives.
- You were given a high interest rate without any valid explanation.
- You weren’t told about end-of-agreement charges or mileage limits.
If you suspect any of the above, you may have a strong case.
Real-Life Example: What the News Says
According to the BBC, many customers are discovering they overpaid for car finance. Some found they were unknowingly paying hundreds more each month than others with the same credit score. One customer told the BBC, “I thought I had a good deal, but I later found out the dealer added a massive commission on top.”
The FCA has received tens of thousands of complaints and is currently investigating whether consumers should receive mass compensation similar to PPI.
For now, claims are handled individually, but momentum is building.
How Much Compensation Can You Claim?
Compensation varies depending on how much you borrowed, the interest rate, and how much extra you paid. On average, successful claims could result in:
- £1,500 to £10,000 in compensation
- A refund of excess interest paid
- The removal of unfair charges from your balance
- In some cases, a complete write-off of the remaining loan
If your agreement involved discretionary commission and you weren’t told about it, your chances of winning compensation are much higher.
It’s important to gather:
- Your original agreement documents
- Any emails or communication with the dealer or broker
- Details of the vehicle and repayment terms
National Claims can help connect you with solicitors who will assess your case and guide you through the process with minimal hassle.
Why Choose National Claims?
National Claims helps individuals across the UK understand their rights and connect with experienced solicitors who specialise in financial mis-selling cases. With their support, you won’t have to navigate the legal process alone.
Whether you’re unsure about your agreement or ready to claim, they can help you take the next step confidently.
Final Thoughts
The car finance mis-selling scandal is just beginning to unfold. With thousands of affected drivers across the UK, the scale of the problem could soon rival that of PPI. If you’ve taken out a PCP or HP deal in the last decade, especially before 2021, it’s worth reviewing the terms.
Unfair interest charges and hidden commissions are not your fault—and you may be entitled to compensation.
Ready to Take Action?
If you think you were mis-sold a car finance deal, don’t wait. Start your claim today and find out if you’re owed money. National Claims can connect you with legal professionals who’ll handle everything from start to finish.
✅ Check your eligibility
✅ Speak with a legal expert
✅ Get the compensation you deserve
Click here to begin your claim or contact National Claims for free advice.
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