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Martin Lewis warns drivers they could be owed £1,100 if they bought a car before 2021

Martin Lewis warns drivers they could be owed £1,100 if they bought a car before 2021

Martin Lewis and his Money Saving Expert team have issued the fresh plea to motorists

Martin Lewis and his band of finance gurus have issued a fresh warning to millions of motorists up and down the United Kingdom if they bought a car before 2021.

At the beginning of the year, Lewis and his Money Saving Expert (MSE) team spent weeks pushing a bombshell investigation launched by the UK's financial regulator, the Financial Conduct Authority (FCA).

Long story short, you could be owed thousands of pounds for being mis-sold car finance through Discretionary Commission Arrangements (DCAs) if you bought a new whip. Stats from the FCA indicate that car buyers paid £1,100 more interest on a typical £10,000 four-year car finance deal.

There was a catch to it; the vehicle had to have been bought between April 2007 and 28 January, 2021.

If the FCA rules that mass payouts should be give to those who were mis-sold, a total of £750 million has been estimated as the repayment figure. Huge.

Lewis is now warning that the 'ruling is getting closer' and if you are yet to put in your potential claim, don't hang about with the FCA investigation set to finish on 25 September and a ruling coming after it.

"You may be able to claim £1,000s back as the FCA is amid a huge investigation into Discretionary Commission Arrangements (DCAs)," Lewis wrote in his latest MSE newsletter.

"These DCAs are where finance firms let car dealers pump up interest rates, without customers being told, and then bunged 'em extra commission if they did. This likely meant huge numbers OVERPAID WITHOUT KNOWING."

Car finance was mis-sold. (Getty Stock Image)
Car finance was mis-sold. (Getty Stock Image)

DCAs were applied to motor vehicles, which includes cars, vans, camper vans and motorbikes. The financial agreement also had to Personal Contract Purchases (PCP) and Hire Purchases (HP). Personal Contract Hires (such as leasing) didn't count.

Your car also had to be for personal use and you can apply for people who took out a PCP or HP agreement that have since passed away. You also don't still have to use it.

So far 1.7 million people have issued potential claims using just the MSE tool alone, with the most complaints being lodged with Black Horse following by VW Financial Services.

With the looming deadline, Lewis explained what can happen next if you have complained.

First up is confirmation from your finance company that you did have a DCA.

"Great, your complaint is logged, you've done all you need for now," he said.

"Unless it requests any further info, get on with your life until September, when the FCA will announce whether compensation is to be paid, and we'll update you with what to do then."

Lewis and the MSE team have issued an updated plea. (ITV)
Lewis and the MSE team have issued an updated plea. (ITV)

Another option is you are given confirmation that you didn't have a DCA. On this, Lewis explained that while it is good you weren't overcharged, you can't expect a payout.

"Shrug your shoulders and forget it," he said.

A third option is that you've only had confirmation that the complaint has been issued, leaving you in limbo.

Lewis wrote: "This is frustrating, especially if you sent it months ago. Yet crucially it means your complaint is logged. Use the table below to see 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."

A fourth situation is you've heard absolutely zilch from the finance company, in which case 'have a private swear', Lewis says, before 'waiting a little longer'. Frustrating, but needs must.

A rarer outcome for some is that you are confirmed to have had a DCA but the car finance company has rejected your complaint, pointing you in the direction of the ombudsman.

If you took out car finance it's worth sending off a complaint. (Getty Stock Image)
If you took out car finance it's worth sending off a complaint. (Getty Stock Image)

Urging calm, Lewis went on: "This is rare, but does happen. In fact most important is your provider's confirmed you've had a DCA and has logged your complaint. The rest is just a fob-off, as until 25 September when the FCA reports, no one knows exactly what'll count as mis-selling. If yours then does, it'll almost certainly have to reopen it (or the ombudsman will).

"As an aside, the Financial Ombudsman has now effectively suspended dealing with these DCA complaints until after 25 September. Yet that's no issue as for all those who complained via the tool, you've 15 months to decide whether to go to it, so it's a wait and see."

And one final outcome is the car finance company asking for more information from you to complete your request, or an inability to find the information in the first place. This is common if you've moved house, for example.

Lewis said: "If you've given it all the info you can, and it can't locate you, it's trickier. The FCA says firms should make serious endeavours to find policies - certainly if you've documentary evidence of a policy and it doesn't, it'll likely be pushed to settle later (if that's what's ordered) based on 'what happened with others in similar circumstances'.

"If not, it depends how long ago it was you took out the finance. If your car finance was active within the last six years, it should have details. If it was longer ago, it could become harder, but it should try. If not, it's another 'wait until 25 September' when harder rules on disclosure are likely to come out (we'll update then)."

Featured Image Credit: ITV/Getty Stock Image

Topics: Martin Lewis, Cars, Driving, Money, UK News, Business