How Do I Check If I Was Mis-Sold Car Finance?

If you purchase your vehicle using car finance, your lender is required to inform you of the terms of the loan.

When the terms aren’t explained properly, or the lender provides inadequate advice, it could mean you were mis-sold the loan.

Here, we’ll explain how you can check whether you have ever been mis-sold car finance and what you can do about it. 👍

Have I Been Mis-Sold Car Finance PCP?

Most PCP car finance agreements are carried out correctly. However, some consumers have been mis-sold contracts.

The most common examples of PCP car finance being mis-sold include:

  • You weren’t informed there would be a commission
  • The car finance package isn’t suited to your circumstances
  • You received bad or negligent advice about car loan alternatives
  • The lender misled you about any additional costs involved
  • You are charged more interest than you should have been

You have the right to file a complaint and potentially receive financial compensation if you have been mis-sold car finance.

At Carmoola, we don’t currently offer PCP agreements. We provide Hire Purchase agreements and ensure all our terms and conditions are transparent, with no hidden fees. Find out how it works before you apply.

Who Can Advise If I Was Mis-Sold a Car Loan?

The Financial Ombudsman Service (FOS) can investigate cases of mis-sold auto finance.

You can make a claim if you have an ongoing car finance arrangement, or if you have already settled your loan.

Whilst it is recommended to file a claim within six years of the agreement coming to an end, it is not necessary.

How to Check If You’ve Been Mis-Sold Car Finance

Before taking out car finance, it’s your responsibility to read through the fine print. However, the lender also has a responsibility to ensure that the terms of the agreement are easy to understand.

You have the right to complain if your car finance arrangement and fees weren’t made clear. For example:

  • You were sold costly extras that you didn’t need
  • You thought you were paying off the car and you’d officially own it, but that wasn’t the case.
  • You were surprised by additional mileage charges

You have the same rights as when you are purchasing products or services. As long as you bought the car from an authorised dealer, you should be protected by the Consumer Rights Act.

If you paid a deposit for the car finance arrangement with a credit card, you may also be entitled to Section 75 protection. This holds your credit card company jointly responsible for assisting with the mis-sold finance.

What Can I Do if Mis-Sold Car Finance?

If you think you have been mis-sold car finance, you can file a claim with the Financial Ombudsman.

The amount you may be entitled to claim is determined by various factors. These include the size of the loan, the duration of the agreement, and the interest rate you were quoted.

Can I Change My Car Finance Provider?

If you are currently in a car finance agreement, it may be possible to change your provider.

It makes no difference whether you're financing a car on HP or PCP, you can change lenders by settling the loan early.

The first step is to obtain a finance settlement figure from your current car finance provider. You can also use an early settlement calculator.

The total you need to pay will depend on how much finance you still need to pay off. There may also be early settlement fees set by the lender.

You will also need to factor in the balloon payment if you have a PCP agreement.

The new lender will assess the car to determine its current value in relation to the amount you need to borrow. 

If you’re worried you may have been mis-sold car finance, our best tip is to check over your agreement carefully. 👍

Read more about car finance:


FAQs About Mis-Sold Car Finance:

How Do I Know if My Car Finance Has Been Mis-Sold?

If you were given inaccurate information, pressured into a deal, or weren't made aware of significant terms and costs, your car finance might have been mis-sold.

Can I Claim for Mis-Sold Finance?

Yes, you can. If you believe your car finance was mis-sold, you have the right to make a claim and seek compensation.

How Long Does a Mis-Sold Car Finance Claim Take?

The duration can vary, but it typically takes a few weeks to a few months to resolve a mis-sold car finance claim.