Archive: MoneySavingExpert's Money Tips Email

Major news update: Plus new guide & tool... 
Martin: Car Finance Mis-selling... are you owed £1,000s? Now for EVERYONE who's bought a car on finance since 2007
After a landmark court ruling, millions more can now potentially reclaim, including some already turned down, but should you?

If you've a sense of deja vu, you'd be right. I've written a similar headline before, but now the whole thing has expanded, millions more may be able to claim money back on past car finance deals on the back of the regulator's response to a landmark Court of Appeal ruling.

What's changed? Until recently, the prime focus was the regulator's final stage investigation into the 40% of car finance policies with hidden Discretionary Commission Arrangements (DCAs) - where dealers could up the interest to get paid more commission without consumers knowing. Our existing Car Finance DCA reclaiming free guide & tool covers that.

Yet a landmark Court of Appeal ruling in October shook things up, with a second issue that covers 99% of car finance policies - all where commission was paid, whether fixed, tiered, DCAs or other - potentially £10bn's worth. So today we launch our new Car Finance Commission Disclosure reclaiming free guide & tool to cover that too.

Let me talk you through what to do in three steps 1: Do a DCA complaint first | 2: New Commission Disclosure complaints | 3: What if you've already done a DCA complaint? First though, a word on m'show.

Step 1. Did you buy a car, van, camper van or motorbike on finance? Start by checking if your car finance had DCA commission.

Back in January, the Financial Conduct Authority (FCA) announced a final stage investigation into hidden DCAs on past car finance policies. DCAs are where finance firms let car dealers pump up the interest rates charged for individual customers, without customers being told, and then bunged the car dealers extra commission if they did.

This meant many likely OVERPAID WITHOUT KNOWING. The regulator is investigating whether that left people unaware they were paying more than needed (it almost certainly did) and could therefore go elsewhere. See our Car Finance DCA reclaiming guide for full info.

The investigation is unlikely to report before May 2025, but there are decent odds of a mass commission redress system which could see an average £1,100 back. So who should check if they've a DCA case?

• It's for motor vehicles: Cars, vans, motorbikes & camper vans.
• Eligible dates: Finance taken out from Apr 2007 to 28 Jan 2021 (if your car finance was after that, it's not you, so jump to step 2).
• Finance type: Personal Contract Purchase (PCP) & Hire Purchase (HP), but NOT Personal Contract Hire (ie, leasing). If you leased your car, that may be covered in step 2 cases, but we won't know definitively until 19 Dec 2024.
• It's about vehicles for personal use: That includes commuting.
• It applies even if the person has passed away: The relevant executor or beneficiary can claim on their behalf.
• It applies even if the vehicle's paid off: Or you no longer own it.

Crucially though, there's no way to know if you've had a DCA without asking, so our easy free complaint tool does two things...

a) It formally asks the finance company if your policy had a DCA.
b) If it did, it asks the firm to log it as a mis-selling complaint.

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.

It's worth noting that as all commissions, including DCAs, are covered by the new Court of Appeal ruling (more below) on a different principle, you could complain that way too. However, my best guess (it's an uncertain situation) at the moment is it is likely better to start with the DCA route (see why, on balance, you should do a DCA claim first).

If you've already done a DCA claim, and been told you didn't have it, then read this next step...

Step 2. A landmark October 2024 Court of Appeal ruling means all car finance deals with undeclared commission were unlawful (though this ruling could be overturned).

In Oct 2024, in a decision that sent shockwaves through the car finance world, the Court of Appeal ruled: "Brokers never obtained the claimants' fully informed consent to the payment... the claimants were not told that it would be [paid], nor the amount nor any other material facts about the commission." Translation: If you weren't told all the facts, including the amount of commission, then it was a breach of the law.

As it's a precedent-setting common law decision, that means right now this is the law in the UK. And as people were rarely told the commission amount, this opens the door to an estimated 99% of car finance cases. So our new Car Finance Commission Disclosure reclaiming guide & tool helps with that.

Yet an application for an appeal to be heard at the Supreme Court has already been put in, and it is almost certain to hear the case. It would not be unusual for the Supreme Court to have a starkly different view to the Court of Appeal and overrule it, thus in practice changing the law again. A decision needs to be made speedily - by spring 2025 - so there's clarity, but there's no guarantee, and the fallout will take time.

Meantime, the regulator has a consultation (a formality, it's almost certain to happen) on putting a 'pause' on firms having to decide on complaints, in order to wait until the Supreme Court's decided, so there's a firm and consistent decision. That consultation reports next week (19 Dec). So who is likely to be covered by the regulator's new pause (and therefore eligible to complain)...

• It's for motor vehicles: Cars, vans, motorbikes & camper vans.
• Eligible dates: Finance taken out from Apr 2007 to roughly Oct 2024 (that's when the court ruled, and many firms changed their terms at that point to include commission details).
• Finance type: Personal Contract Purchase (PCP) & Hire Purchase (HP) are definitely part of it. Whether Personal Contract Hires (ie, leasing) are included is something we won't know definitively until the consultation ends on 19 Dec 2024 (we'll update you in this weekly email then).
• It may impact you if you've been told you didn't have a DCA: If you did a DCA claim and it said 'no DCA', see step 3.
• It's about vehicles for personal use: That includes commuting.
• It applies even if the person has passed away: The relevant executor or beneficiary can claim on their behalf.
• It applies even if the vehicle's paid off: Or you no longer own it.

'Yet even if you're eligible, I'd try the DCA route first. If you then find you didn't have a DCA or had car finance after the deadline, look at this path.' See why I'd probably do a DCA first.

If you choose this route, here's what to do...

Our free guide and tool will help you draft your enquiry 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, fill in as much detail as possible, and the tool will produce a letter you can send off.

Step 3. Already submitted a DCA claim? What next?

Of course, what you do depends on the response you got, so let's run through the most common ones.

• It says 'you DID have a DCA'. Great, your complaint is logged, you've done all you need to until May 2025. If it's also a case that the Supreme Court upholds the Court of Appeal decision on Commission Disclosure, this would be included within the FCA's DCA ruling anyway.
   
• It says 'your car finance DIDN'T have a DCA'. What matters next is whether you had commission of any variety. Some lenders will have told you that you did, some won't have mentioned it. In either case, as the huge majority of car finance cases did, then you could go through the step 2: Commission Disclosure complaints route.
  
  It's worth noting our tool for that is drafted as if it's your first complaint. While you could alter the drafting, it's not necessary, especially as some firms are telling us it's best not to, as their technology is detecting our templates so they can deal with them more quickly.
  
  If your letter categorically says you didn't have any type of commission arrangement at all, then you definitely weren't overcharged, so that's good, but it means no payout is coming, so shrug your shoulders and forget it.
   
• It has only 'acknowledged your complaint'. This is frustrating, yet crucially, it means your complaint is logged, so you've got the necessary timestamp. Find out how car finance firms are responding according to our survey to get a feel for whether your delay is normal for the firm (if so, 'it's them, not you'), or whether you're an outlier - if the latter, you may want to chase it up.
  
  
• It hasn't replied at all. If you complained over a month ago, i) check your email sent box that it did send, ii) check your junk mail for replies, iii) check the email address you sent it to. If all of those are good, see if yours is an isolated incident for the firm - in which case, resend.