FridayOL

Good news for anyone in New Zealand who took out car finance before 2021! A landmark UK Supreme Court ruling has implications for our shores, potentially meaning millions are owed refunds – and that could be up to NZ$1,600+ per person. Money-saving expert Martin Lewis has been keeping a close eye on the situation, and here's what you need to know.

The Background: What's This All About?

The case revolves around 'hidden commission' – payments car finance companies made to dealerships based on the interest rate charged to customers. Essentially, dealerships were incentivised to push for higher interest rates, even if you could have qualified for a better deal. While this originated in the UK, similar practices may have occurred in New Zealand, prompting calls for investigation and potential compensation.

The Supreme Court Ruling

The UK Supreme Court ruled that these undisclosed commissions were unfair and could render car finance agreements unlawful. This means millions of people who took out car finance agreements before 2021 in the UK could be entitled to a refund of the mis-sold interest.

What Does This Mean for New Zealanders?

While New Zealand's financial regulations differ from the UK's, the ruling has sparked discussions about whether similar practices occurred here. Consumer advocates are urging the Financial Markets Authority (FMA) to investigate car finance agreements entered into before 2021 to determine if undisclosed commissions were a factor and if compensation is warranted.

Who Could Be Eligible?

If you took out a car finance agreement in New Zealand *before* 2021 and believe you were charged a higher interest rate due to undisclosed commissions, you might be eligible for a refund. Here's who to consider:

• Personal Loans: Finance agreements for purchasing a vehicle.
• Lease Agreements: Similar to loans, but with different terms.
• Agreements with dealerships: Focus on those entered into before 2021.

How to Check if You're Eligible & What to Do

Here's a step-by-step guide:

1. Gather Your Documents: Find your car finance agreement.
2. Review the Agreement: Carefully look for any mention of commissions or incentives paid to the dealership. If it's not explicitly stated, that's a red flag.
3. Contact Your Lender: Reach out to your finance provider and ask them to disclose any commissions paid to the dealership at the time you took out the loan. Keep a record of your communication.
4. Seek Advice: If you suspect you were mis-sold, contact the Financial Disputes Resolution Service (FDRS) or a consumer advocate for guidance.
5. Be Aware of Time Limits: There are time limits for making claims, so don't delay!

Martin Lewis's Advice

Martin Lewis emphasizes the importance of checking your old finance agreements and being proactive. While the process may take time, the potential refund could be significant. He advises consumers to gather their documents and seek professional advice if needed.

The Bottom Line

The UK Supreme Court ruling has shone a light on potential unfair practices in car finance. New Zealanders who took out car finance before 2021 should take action to investigate their agreements and see if they're entitled to a refund. Don't miss out on a potentially significant payout!