Consumers who took out car finance agreements before changes were introduced to commission arrangements may be entitled to raise concerns about how their finance agreement was sold and whether they were charged unfairly.
Understanding how these agreements worked can help you determine whether you may have grounds to make a complaint.
How to Find Out if You Were Affected
If you purchased a car, van or motorbike using a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement before January 2021, it may be worth reviewing your finance agreement.
You should:
- Check your finance paperwork.
- Review the interest rate applied to your agreement.
- Confirm who arranged the finance.
- Request information from your lender if details are unclear.
Some historical finance agreements included commission structures that allowed brokers or dealerships to influence the interest rate offered to customers.
If you believe you may have paid more than expected as a result, you can contact your finance provider to request further information.
Will Making a Complaint Affect Your Credit Record?
Making a complaint about a finance agreement should not affect your credit score or result in any form of blacklisting.
Consumers have the right to question financial products and services they believe may have been sold unfairly or without sufficient transparency.
Submitting a complaint is simply part of the normal consumer protection process.
What Types of Finance Agreements Could Be Involved?
The issue primarily relates to:
Personal Contract Purchase (PCP)
A PCP agreement allows drivers to make monthly payments while keeping options open at the end of the agreement, including purchasing the vehicle outright.
Hire Purchase (HP)
Hire Purchase agreements spread the cost of a vehicle over fixed monthly payments, with ownership transferring after the final payment has been made.
Not all finance agreements were affected, so each case should be assessed individually.
Who Should You Contact?
If you believe your finance agreement may have been affected, your first point of contact should be the finance provider named on your agreement.
When making a complaint:
- Explain your concerns clearly.
- Request copies of relevant documentation.
- Ask for details of any commission arrangements linked to the agreement.
- Keep records of all correspondence.
If you remain dissatisfied after receiving a response, you may be able to escalate the matter through the appropriate dispute resolution channels.
How Much Compensation Could Be Available?
Any compensation will depend on the individual circumstances of the agreement.
Factors that may influence any potential outcome include:
- The type of finance agreement.
- The amount borrowed.
- The interest rate charged.
- The length of the agreement.
- Whether commission arrangements influenced the final cost.
As every agreement is different, there is no standard compensation amount.
Recommended reading:
What Happens Next?
Regulatory reviews and industry investigations can take time to complete.
If you believe you may have been affected by unfair commission arrangements, it is sensible to gather your paperwork, review your agreement and contact your finance provider for clarification.
Keeping accurate records and acting promptly can help ensure any concerns are addressed correctly.
For more ownership advice, consumer guidance and vehicle-related tips, visit Jamjar’s maintenance guidance hub.
Final Thoughts
Understanding your finance agreement is an important part of vehicle ownership. Whether you’re reviewing past agreements, monitoring ownership costs or considering your next vehicle, staying informed can help you make better financial decisions.
If you’re thinking about changing vehicles, start by finding out what your current car could be worth with a free online valuation from Jamjar.