Motorists who purchased cars before 2021 on finance deals should be doing four things to prepare after a warning from Martin Lewis.
The MoneySavingExpert highlighted a Financial Conduct Authority (FCA) investigation into “widespread misconduct” in the motor finance trade.
Those who purchased vehicles between 2007 and 2021 on PCP or finance contracts are set to be affected with “millions” expected to receive compensation.
The probs is expected to take a few months with the findings likely to come out in the autumn.
However, in the meantime, Aidan Rushby, CEO and founder of Carmoola has exclusively told Express readers how to ensure they are ready.
Check paperwork
Those who purchased models before 2021 should be checking the small print to see if commission charges have been added.
Forms with this on could have a case so it’s best to work out now whether you may be involved later down the line.
Aidan told Express.co.uk: “If you bought a car on finance before January 2021, gather and check your contract and terms and conditions for details of the commission paid to the dealer.
“Look for larger-than-expected interest rates or suspiciously high monthly payments, potentially indicating an inflated loan due to hidden commissions.
“The FCA has placed a temporary freeze on companies having to handle complaints, so while you still can complain now – and you may choose to – they don’t have to take action yet.”
Review options
The FCA announced its initial investigation on its website and more updates are likely as the situation develops.
Aidan warned: “Keep an eye on the advice issued from independent sources like the FCA or the Financial Ombudsman Service (FOS) for guidance on claiming compensation if you suspect mis-selling.”
Be cautious
Money expert Matt Allwright has already warned that scammers may take advantage of the investigation to get information out of vulnerable drivers. Aidan also reveals car owners could become targets for fraudsters to those charging over the top for basic details
He told Express.co.uk: “Carefully evaluate any claims management companies who may approach you about starting legal action – in the worst cases, they could be scammers, or there’s a chance you’ll get charged a lot for a service that would otherwise be free or low-cost (this practice was rife during the PPI era).”
Expect more
Aidan has claimed motorists should learn from the experience to ask more questions about their policy.
Motorists should be urging firms to reveal extra information about any hidden charges before being caught out later down the line.
Aidan commented: “Demand clear and upfront information from car finance providers, including commission payments and the true cost of your loan.
“Choose lenders that prioritise transparency and put the customer first – and check their verified customer reviews for additional peace of mind.”
