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Martin Lewis warning to drivers who bought a car between 2007 and 2024


Money Saving Expert Martin Lewis has issued a warning to anyone who bought a car, van or motorbike between 2007 and 2021.

The money maestro has revealed that a landmark investigation into car finance has found that anyone who bought a car on finance in that 14-year period could be owed an average of £1,100 in compensation.

The Financial Conduct Authority announced an investigation into Discretionary Commission Arrangements back in January.

Speaking on the latest episode of The Martin Lewis Money Show Live on ITV1, Martin explained: “Lenders let brokers and car dealers increase the interest rates to increase their commission.

“Millions overpaid without knowing, so you won’t know if it happened to you.”

He explained that the average claim could be worth £1,100, and represents the difference between the minimum interest and the amount you were actually charged.

In order to be eligible, you need to have taken out car finance between April 2027 and January 28, 2021.

The compensation applies to car, van, motorbike and camper van purchases bought with Personal Contract Purchase (PCP) or Hire Purchase (HP) agreements, but not leasing (otherwise called Personal Contract Hire).

If you fall into those categories, you must contact the company which you paid for your car finance and ask whether your deal included a DCA.

If it did, you must then log a formal complaint.

Martin added via his MSE website: “It’s already generated over 2.5m complaints for people. It’s worth doing that before anything else here. And the sooner you do it, the better, as it reduces the risk of you being time-barred out once decisions are made.”

But even if you’ve already put in a DCA claim and been told you don’t have it, there is another route which has since opened up.

In October, a landmark Court of Appeal ruling determined that all car finance potentially broke the law if it didn’t make clear to the buyer what the commission percentage was on the deal.

So if you already tried the DCA route, attempting to then complain on the basis the finance did not disclose the commission is your next best option. This applies to cars bought between 2007 and October 2024.

Martin’s MSE site adds: “In the first instance your enquiry should go to the lender that provided the car finance. This is the firm you actually paid each month – not the broker or car dealer.

Check any agreement documentation you have and collect as much information as possible about your car finance agreements (and keep them somewhere safe for future).”

Then send a complaint to your lender – you can use the free MSE tool to do this.

But Martin warned that this second route could potentially be ‘dangerous’ to the entire finance industry, adding: “The wider Court of Appeal decision sets new strong standards for car finance commissions going forward. Yet on mulling it, even I find it difficult to believe that retrospective redress is due from car finance firms with fixed commissions, as they were following regulator’s guidelines. And, even if redress is due, the test surely should be something like: “was it hidden that there was commission and, most importantly, was the commission charged excessive?”

“…I wrestled about whether we do a help tool for this or not. In the end I decided that MSE’s role is to provide info for consumers, and if we don’t do it, the claims firms will sweep everyone up and people will then lose a chunk of any pay-outs that may come.

“Yet please don’t read the fact we have a tool as a blanket ‘everyone should do this’. I hope you’ll think carefully about whether you feel you were wronged and lost out, and only go for it if you do.”

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