Car finance claim – are you eligible?
Bought a car on finance between 2007 and 2020? You could have a car finance claim! Discover your eligibility with our free, no-obligation check and recoup your losses!
By signing and submitting this document, you are authorising Car Claim Specialists to write to your finance provider(s) and obtain information relating to your motor finance agreements past and present to check your eligibility for compensation. There is no fee for this check and you are under no obligation to proceed should you have grounds to claim. You are also free to opt out of our services at any point.
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About the car finance scandal
Mis-selling happens when individuals do not receive essential information necessary for making informed decisions. For example, did the contract offered represent good value for money?
Instances that might lead to mis-selling and a car finance claim or payout include situations where the salesperson, for example, failed to provide comprehensive details about the agreement. Additionally, if they engaged in misleading practices, offered inadequate advice, or, moreover, neglected to inform you about any commissions or interest charges associated with the arrangement (DCAs), such claims are likely to arise.
Check your eligibility by taking our free, no-obligation, car finance compensation check today.
about car claim specialists
expertise you can trust
Our board brings over 20 years of combined experience in claims management. We expertly guide the process of identifying car finance claims and compile fully packaged cases to submit to our panel of solicitors.
Our operational approach reflects our commitment to exceptional customer service. The claimant experience is simple, streamlined, and transparent – we handle the heavy lifting, so you don’t have to.
car finance claim processing
review
We’ll review your documents to confirm if you’re eligible for a car finance claim.
negotiate
One of our Legal Panel firms will process and negotiate your claim.
compensation
Receive your payout for the mis sold car finance.
review
We’ll review your documents to confirm if you’re eligible for a car finance claim.
negotiate
One of our Legal Panel firms will process and negotiate your claim.
compensation
Receive your payout for the mis sold car finance.
Were you affected by the car finance scandal?
Complete our car finance compensation check to see if you were affected by a mis sold car finance
car finance claim FAQ's
What is PCP finance?
In short, Personal Contract Purchase (PCP) is effectively a personal loan. It lets drivers spread vehicle payments over time. For example, you can pay over two or three years instead of paying the full amount upfront. However, unlike a typical loan, you won’t pay off the full car value or automatically own it at the end. Ownership only transfers if you choose to make the final lump-sum balloon payment after the agreement ends.
PCP is a complex financial product made up of a deposit, borrowed amount, and a final balloon payment. Because of this complexity, many drivers may have grounds for a car finance claim if key details weren’t clearly explained.
What is HP finance?
Hire Purchase (HP) is a type of car finance that covers the costs of used or new vehicles. If you find yourself unable to afford a new car upfront, this option enables you to drive away with your desired vehicle without the need to pay a substantial lump sum.
HP allows you to pay for a car in instalments over a set period of time. You’ll typically pay a deposit to release the funds for leasing the car over the agreed term, then pay the lender back over time. At completion, a final one off payment is due. Meaning, you will then own the car outright.
What is a discretionary commission arrangement (DCA)?
The Financial Conduct Authority (FCA) defines a discretionary commission arrangement (DCA) as an agreement between lenders and brokers that allowed brokers to adjust the interest rates offered to customers, often resulting in higher commissions for brokers when interest rates increased. While the FCA banned this practice in 2021, they are now conducting an industry-wide review to determine whether there has been widespread non-compliance with the relevant regulations, potentially leading to financial loss or harm to consumers. Read more about DCA here.
Why do dealers offer PCP and HP finance?
PCP is the most prevalent financial product in the market. Dealers use PCP finance to draw in people who want to change their car every few years.
On the other hand, HP finance is an agreement that gives you the option to own the car at the end of the agreement. This is a fixed cost throughout the term with the Annual Percentage Rate (APR) set before the contract begins.
Why has the mis-selling of car finance and the rise in car finance claims only come to light now?
A recent Financial Conduct Authority (FCA) investigation discovered widespread evidence of mis-selling on all types of vehicle financing options.
The FCA discovered that brokers had discretion to adjust interest rates in the car loan scandal. As a result, charging higher interest rates to consumers led to larger commission payments to dealerships from finance providers. It concluded that this scandal might have cost UK consumers an estimated £300,000,000 per year between 2007 and 2020.
Mis-selling was found across all vehicle types involved in the car loan scandal. For instance, this includes new and used cars, vans, motorcycles, motor homes, and caravans. Additionally, this issue affected all vehicle financing options, such as personal contract hire (PCP), hire purchase (HP), contract hire, and car loans. Among these options, PCP agreements were the most popular, characterized by lower monthly payments followed by a final lump sum or ‘balloon’ payment. Therefore, as PCPs are essentially interest-only loans, interest charges were often higher than anticipated in the car loan scandal – another common trigger for a car finance claim.
In 2021, the FCA banned discretionary commission arrangements (DCAs).
Who Is Eligible to Seek Compensation for the car finance scandal?
If you have acquired a vehicle through PCP or HP financing between 2007-2020 and the financing arrangement was improperly sold to you, you might have grounds to pursue compensation for mis sold car finance.
In short, eligibility for mis-sold HP or PCP finance claims qualify for a number of reasons. They apply to individuals who have encountered situations where the salesperson failed to provide a comprehensive overview of available financing options, inadequately explained the contract’s intricacies, such as interest rates. Additionally, they omitted conducting affordability assessments or neglected to disclose information about their own commission earnings.
Furthermore, mis-sold car finance claims can be initiated under the following circumstances:
- Compensation claims can be lodged for both new and pre-owned vehicles procured via financing.
- Additionally, claims can encompass various types of vehicles, ranging from cars to vans and trucks.
- Agreements that are either ongoing or have concluded are eligible for claims.
- It is possible to file claims for multiple vehicles concurrently.
How long does a claim take?
The timeline for resolving your claim can differ depending on the circumstances. For instance, if the car dealership or finance broker acknowledges their role in the mis-selling, you may expect to receive compensation within a few months. However, if there is a dispute regarding liability, the process might extend to a range of 12 to 18 months. Therefore, engaging an experienced member of our panel to handle your case can expedite the claims process.
What is the average mis-sold car finance payout?
The precise compensation amount for a car finance payout will fluctuate and numerous factors must be considered, for example:
- Loan amount: The greater the loan, the greater the owed compensation.
- Agreement Date and term: The more extensive your history of loan payments, the higher the owed compensation.
- Interest rate disparities and the discrepancy between the quoted rate and the appropriate rate.
How much will your service cost me?
Initiating a mis-sold car finance claim won’t entail any upfront costs. Additionally, enquiring with our expert panel comes at no charge. If they beleive their is grouds for a claim, it will be conducted on a No Win, No Fee basis, meaning you won’t face any fees for their time even if the outcome is unfavorable.
Is it necessary to engage the services of a Solicitor or Claims Management Company for the representation of this particular claim?
No, it is not imperative to enlist the assistance of a third-party entity for the pursuit of this claim. Therefore, you retain the right to directly address your concerns and submit a complaint to the responsible party without the need for external representation by a firm or individual.