Martin Lewis issues costly warning to every Brit with a car finance claim

Martin Lewis is urging Brits to be wary of car finance reclaiming adverts, warning they could take 30 percent of your money and leave you with nothing in return.

The money saving expert noted a marked increase in adverts, which are currently appearing all over social media, claiming you could be 'owed thousands' from car finance lenders.

It comes after millions of people were allegedly mis-sold car loans after it became apparent car dealers were being offered hefty commissions, leading to car buyers paying more than they should have.

Since then, a number of companies have been running adverts offering to find out if you are owed compensation from mis-sold car finance.

According to Martin, the adverts tend to be run by claims management firms or law firms, who will promise 'no win, no fee' deals in exchange for tracking down any money owed, but there's one major reason not to go through these companies.

"There is a major case going through the Supreme Court — that's the top court in the land — about car finance, and other cases are on hold because of it," Martin explained in a video on his social media.

"They heard the case in May. We're expecting them to, what's called 'hand down' – tell us the decision at some point in July. That's not guaranteed, but it's likely to be at some point this month, in July, and everything awaits that."

However, the main reason people might want to hang fire on signing up to any of these adverts is because the regulator, the Financial Conduct Authority (FCA), has announced it's considering implementing an automatic payout system.

"What that would mean: you don't need to claim, firms would have to contact you if you've been miss-sold, and they would have to give you the money," the financial guru explained.

"Now, if they're going to do that and you signed up to a 'no win, no fee' firm, then you would still have to give it potentially over 30 percent of your money, even though it hasn't done anything."

(bymuratdeniz / Getty Stock Images)

This point has been echoed by the FCA, which said: "Consumers should be aware that by signing up now with a claims management firm or law firm, they may end up paying for a service they do not need and losing up to 30 percent of any money they may receive."

If you think you might be owed money from car finance the best thing to do right now, is to wait and see what the Supreme Court decides, or you can get a claim in yourself, without needing to go through a claims management company. The MoneySavingExpert website has a free tool to help with this.

"Remember the big picture, the big message I'm trying to give you right now, is the court may end up ruling that you have already been ripped off once. Don't rip yourself off again by pointlessly signing up to a 'no win, no fee' firm, in the couple of weeks' run-up before we hear what the Supreme Court is going to say," Martin concluded.

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