FridayOL

Millions of drivers in the UK may have unknowingly paid back more than they should have on their car finance deals. This is often due to a practice called 'discretionary commission arrangements' (DCAs), which allowed car dealerships to receive extra payments from lenders. If you suspect you've been mis-sold car finance, you have the right to reclaim what you're owed. But should you go through a claims company, or handle it yourself?

What are Discretionary Commission Arrangements (DCAs)?

DCAs were agreements between car finance lenders and dealerships. Dealerships could receive extra commission payments from the lender, often based on factors like the interest rate charged to the customer or the length of the finance agreement. The Financial Conduct Authority (FCA) ruled in 2021 that these arrangements were often unfair and resulted in customers paying higher interest rates than they should have.

Why Were DCAs Deemed Mis-Selling?

The FCA found that DCAs created a conflict of interest. Dealerships were incentivized to prioritize their own profits over the best interests of the customer. This could lead to customers being pressured into accepting higher interest rates or longer finance terms to benefit the dealership and the lender.

How to Check if You've Been Mis-Sold Car Finance

Here's what to look for:

• Review Your Finance Agreement: Look for any mention of discretionary commission or arrangements.
• Compare Interest Rates: Consider whether the interest rate you paid was significantly higher than what was available at the time.
• Consider the Overall Cost: Did you end up paying a substantial amount of extra interest over the life of the loan?

Claiming Back Your Money: DIY vs. Claims Company

You have two main options for claiming back mis-sold car finance commission:

1. DIY Claim: This involves contacting your car finance provider directly and submitting a formal complaint. You'll need to gather evidence, such as your finance agreement and any correspondence with the dealership. While this can be time-consuming, it's free and allows you to retain control of the process.
2. Claims Company: Claims companies handle the entire process for you, from gathering evidence to negotiating with the finance provider. However, they typically charge a commission (often a percentage of your payout) if they are successful.

Why Parkers Recommends Handling it Yourself

While claims companies can seem appealing, Parkers strongly advises against using them. Here's why:

• Cost: You'll lose a significant portion of your payout to commission fees.
• You Can Do It Yourself: The process is manageable, and there are plenty of resources available to guide you.
• Control: You maintain control over the claim and can respond directly to any queries from the finance provider.

Resources to Help You With Your Claim

• FCA Guidance: The FCA website has comprehensive information about DCAs and how to make a complaint.
• MoneySavingExpert: This website offers a free template letter for making a claim.
• Citizens Advice: Citizens Advice can provide free and impartial advice on consumer rights.

Don't delay! The deadline for claiming back mis-sold car finance commission is approaching, so take action now to reclaim what you're owed. With a little effort, you can potentially recover a significant sum of money.