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    • You MUST ask these 4 questions when buying car finance or risk losing £1,000 after mis-selling scandal
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    You MUST ask these 4 questions when buying car finance or risk losing £1,000 after mis-selling scandal

    Sakege Posted on

    A LAWYER has revealed the four questions you should ask yourself before buying a car with finance following the mis-selling scandal.

    British could be in the billions as part of a compensation scheme that could “overshadow” PPI after widespread negligence was discovered in the motor industry.

    A lawyer has revealed the four questions you should always ask yourself when buying a car with financing

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    A lawyer has revealed the four questions you should always ask yourself when buying a car with financingCredit: Getty

    The Financial Conduct Authority (FCA) is investigating the unfair use of commission payments which meant motorists unknowingly overpaid interest on their loans.

    Last week, the Court of Appeal issued a historic ruling In three cases, dealers could not legally receive commissions from financial providers unless they had the “fully informed consent” of customers when the deal was agreed.

    The ruling also apparently implied that dealers had not received such consent from many drivers when they signed their financing contracts.

    Sam Ward, director of Sentinal Legal (the firm that successfully handled one of the three cases), sat down with solar motors to explain how motorists could protect themselves from shady practices in the future.

    He said: “I think anyone interested in car finance at the moment should be prepared to shop around.

    “There is no confidence in the market.

    What is the FCA investigating and who is entitled to compensation?

    By Jacob Jaffamotor reporter

    What is being investigated?

    The FCA announced in January that it would investigate allegations of “widespread misconduct” relating to discretionary commission arrangements (DCAs) in cars. loans.

    When you buy a car with financing, you are effectively loaned the value of the car while you pay it off.

    These loans are charged interest payments and are often arranged on behalf of the lenders by brokers (usually the financial arm of a concession.

    These brokers earn money in the form of a commission – a percentage of the loan’s interest payments.

    DCAs allowed brokers, to some extent, to increase the interest interest rate on a loan, which in turn increased the amount of commission they received.

    The practice was banned by the FCA in 2021.

    Who is entitled to receive compensation?

    The FCA estimates that around 40% of car sales may have been affected before 2021.

    There are two criteria you must meet to have the opportunity to receive compensation.

    Firstly, you must make a claim in relation to a finance agreement for a motor vehicle (including cars, vans, motorcycles and motorhomes) which was agreed before January 28, 2021.

    Secondly, you must have purchased the vehicle through a mechanism such as personal contract purchase (PCP) or hire purchase (HP), which make up the majority of finance agreements and mean that you own the vehicle at the end of the agreement .

    Drivers who rented a car through something like a personal rental agreement, where the car is returned at the end of the lease, are not eligible.

    “This guy or girl (the shopkeeper) is there to sell you something and, clearly now, he is there to sell you a series of products without you realizing it.

    “Ask the big four questions.

    “If you are happy to continue with your finance After knowing all the information, it’s pretty fair.

    “But in the vast majority of cases, people are going to fight back.

    ‘It’s the next PPI’: Top lawyer claims Brits owe ‘billions’ over dodgy car finance deals… here’s how to make your claim

    “Finance is a negotiable product.”

    The “big four” he referred to are a set of questions outlined in the court case that cover all aspects of the commission agreement “fully informed consent” is necessary.

    Before accepting any financial contract, Sam recommends asking:

    1. What is the nature of the relationship between you (the customer) and them (the distributor)? Specifically, if they are aware that they have a “fiduciary responsibility” to you.
    2. Does the distributor earn commission? in finance not just the car?
    3. How exactly is this commission on finances calculated?
    4. How much commission will the dealer receive for the financing?

    This should tell you everything you need to know about how your payment amount and interest rate have been set.

    However, Sam added that this would probably reveal that you could be overpaying in any case.

    He explained: “When you are well informed, go to your main street bank.

    “Most of the time they have products listed on the website so you can log into your online banking and get pre-approved.

    “I’m 90% sure the bank will always trump the car dealer because they don’t charge these huge fees.”

    Comes after the FCA extended the deadline for its report on the matter, which could delay the payment of compensation.

    Sakege
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