Motorists who purchased cars on finance may be eligible for billions of pounds in compensation following a landmark test case.
In 2017, Marcus Johnson, 34, from Cwmbran, Torfaen, bought his first car, a Suzuki Swift, without being informed that the dealership was receiving a 25% commission, which was added to his repayment amount.
In a pivotal Court of Appeal ruling in October, involving Johnson and two other claimants, the finance company was ordered to repay the hidden commission plus interest. As a result, Mr. Johnson is set to receive just over £3,200.
The PCP motor finance scandal benefits buyers by exposing cases where they may have been mis-sold finance agreements, potentially leading to compensation or refunds. Buyers gain:
This scandal empowers buyers to challenge unfair practices and promotes more ethical standards in car financing.
If a loan is deemed unaffordable, borrowers may be entitled to redress, such as a refund of interest or fees, or adjustments to the terms
Affordability Refunds for Large Loans and Car Finance A Quick Guide to Affordability Refunds for Loans and Car Finance What Types of Loans Can You
How to get a refund on store and credit cards Have you ever had a catalogue, credit card, or store card with a credit limit
Did You Buy a Car on Unaffordable Finance? Were you handed the keys to your new car, only to find the finance unaffordable from the
**Note: For exceeding 120 no. of payments, a group of 12 payments will be combined into a single payment number for better chart visibility.
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The repayment amount shown using this calculator is an estimate, based on information you have provided. It is provided for illustrative purposes only and actual repayment amounts may vary. To find out actual repayment amounts, contact us. This calculation does not constitute a quote, claim approval, agreement or advice by Claims 4 PCP. It does not take into account your personal or financial circumstances.
Snowball Your Debts Best if you can make at least the minimum payments each month and your debts are decreasing, not growing. This approach improves your credit rating over time, unlike other solutions that may negatively affect it.
Involves paying less than the usual monthly payments while creditors freeze interest—this is often agreed upon. Can be a temporary measure, e.g., until you secure another job. Payments can be as low as £1 per month, though these are typically holding measures rather than permanent solutions.
A great option if you owe less than £30,000 (this limit increases to £50,000 in June 2024), have less than £75 in monthly disposable income, and don’t own a house. Individual Voluntary Arrangement (IVA) - suitable for those with a steady income and assets to protect, such as a house with equity.
"irresponsible lending" or "unaffordable lending." This refers to situations where a lender fails to properly assess whether a borrower can afford a loan without undue financial hardship, as required by regulations set by the Financial Conduct Authority (FCA).
Lenders must assess whether the borrower can make repayments without compromising their ability to meet other financial commitments, such as household bills or living expenses. Consumer Credit Act 1974: This law regulates consumer credit agreements, including car finance, and provides protections for borrowers.
Breach of FCA Rules: The FCA requires lenders to ensure loans are affordable, and failure to comply can lead to a complaint through the Financial Ombudsman Service (FOS) or legal action. If a loan is deemed unaffordable, borrowers may be entitled to redress, such as a refund of interest or fees, or adjustments to the terms of the loan.
Please remember there may also have been fees added to the finance too.
There are three less common debt solutions to consider. Full & Final Settlements are ideal if you’ve been on a Debt Management Plan (DMP) or unable to make payments for some time and now have access to a lump sum to negotiate settlements. Write-off debts are usually only an option in exceptional circumstances, as creditors rarely agree to this. Administration Orders, once more common, are now extremely rare, with only 16 issued in England and Wales in September 2016.
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