If you believe you were mis-sold car finance, understanding the applicable time limits for seeking compensation is crucial. This article outlines key details about these limits, recent regulatory developments, and the steps you can take to file a claim effectively.
Understanding Mis-Sold Car Finance
Mis-sold car finance typically refers to agreements where customers were not provided with full transparency regarding the terms, such as commission fees or interest rates. Prior to 28 January 2021, car dealers often used discretionary commission arrangements (DCAs), where they set interest rates and earned higher commissions for selling costlier agreements. This practice was banned by the Financial Conduct Authority (FCA) to enhance transparency and consumer protection.
Key Time Limits
The rules around compensation claims depend on the time elapsed since the agreement was made or when the issue became apparent:
- You can claim for mis-sold car finance agreements taken out between April 2007 and January 28, 2021.
- The FCA investigation focuses on car finance deals made during this period.
- If your finance agreement was active within this time frame, you may be eligible for compensation.
- The 28 January 2021 cut-off marks the date the FCA banned discretionary commission models, which were key to the mis-selling.
- You should submit your claim within 6 years of the finance agreement or 3 years from when you became aware of the mis-selling — whichever comes later.
- It is advisable to act promptly to avoid missing out on potential compensation.
For agreements entered into before January 2021, many consumers are now eligible for compensation due to the FCA’s ongoing investigations. Importantly, even if your complaint has previously been rejected, you may still be entitled to re-submit under new FCA rules.
FCA Pause on Complaint Deadlines
The FCA has temporarily paused the obligation for lenders to respond to DCA-related complaints until 4 December 2025, providing them additional time to investigate and respond fairly. This pause applies to claims made between 17 November 2023 and 4 December 2025, extending the usual eight-week response window.
Steps for Claiming Compensation
- Review Your Agreement: Examine your car finance agreement for evidence of undisclosed commissions or misleading terms. Agreements between 2007 and January 2021 are particularly relevant due to historical practices under investigation.
- File a Complaint: Contact your lender directly, stating your concerns and providing any supporting documents. If you are unsure of your claim Contact National Claims where we will put you in touch with experienced finance solicitors where they will help you with your compensation.
- Seek Legal Guidance: If your complaint is not resolved to your satisfaction or if you are unsure of the next steps. Consult National Claims where they can assess your case and offer guidance on how to move forward. We offer free initial consultations, which can help you understand whether you are entitled to compensation without incurring significant costs.
By following these steps, you can increase your chances of success in resolving your car finance dispute and ensuring that any mis-sold products are corrected. Keep in mind that compensation may include refunds, reduced payments, or interest adjustments, depending on the specifics of your case.
Mis-sold Vehicle Finance Claims Checker
Our mis-sold car finance claims calculator below estimates the level of compensation you may be able to reclaim for a mis-sold car finance agreement.
Add the value of your vehicle, the length of your agreement, and the interest rate you paid to the calculator below. Then, compare this against a rate that you may have been offered if you weren’t mis-sold.
Disclaimer : The Mis-sold Car Finance Claims calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim. If you need more help and clear understanding Contact National Claims.
What National Claims do
- Put you in touch with a solicitor with expertise in consumer finance law. They can assess your case and offer guidance on how to move forward.
- You can increase your chances of success in resolving your car finance dispute. Keep in mind that compensation may include refunds, reduced payments, or interest adjustments, depending on the specifics of your case.
What Compensation Could Include
Compensation typically involves:
- Refunds of overpaid interest or repayments.
- Goodwill Payments to address inconvenience.
- Additional Interest to compensate for time lags.
Note : The exact amount is determined case by case, considering the degree of mis-selling.
Future Developments
The FCA is expected to release findings from its investigations in May 2025, potentially influencing how compensation claims are assessed. Consumers who believe they were impacted are encouraged to act promptly to preserve their rights.
Conclusion
Claiming compensation for mis-sold car finance is time-sensitive but manageable with the right information. By understanding the applicable time limits and following the outlined steps, consumers can navigate the claims process effectively. For agreements involving discretionary commission arrangements, it is especially important to act before 2025, given the FCA’s paused timelines and evolving regulations.
If you suspect you’ve mis-sold a PCP car finance deal, it’s important to explore your options for compensation without delay. Understanding the signs of mis-selling is the first step toward reclaiming what’s rightfully yours. Thanks to growing awareness from experts like Martin Lewis, consumers are now better equipped to navigate the complexities of car finance claims and hold dealerships accountable.
Take action today—review your agreement, gather evidence, and let National Claims help. Our team connects you with experienced solicitors who specialise in PCP finance claims, ensuring a smooth and effective process to secure the justice and compensation you deserve.
Making a Mis-sold Car Finance Deal with National Claims
At National Claims, we understand the financial burden and frustration that can arise from being mis-sold a Personal Contract Purchase (PCP) car finance agreement. If you believe you were misled or overcharged, we’re here to help you seek justice and compensation.
No Win, No Fee
At National Claims, we believe that everyone deserves access to legal support when dealing with mis-sold car finance. That’s why we work on a “No Win, No Fee” basis—meaning you won’t pay any upfront legal fees. The solicitor’s fees are payable only if your claim is successful, allowing you to take action against mis-sold car finance agreements without financial worry.
Customers pay up to 15% to 30% (incl. VAT) of the amount recovered towards solicitor costs, Whether you’re dealing with a mis-sold car finance claim or seeking justice for other financial issues, National Claims is here to support you every step of the way.
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