If you’ve recently financed a car, you may have been led to believe that the deal you signed up for was a perfect match for your needs. Unfortunately, not all car finance deals are as straightforward as they seem, and some people find that they have been mis-sold car finance without even realising it. If you suspect that you were mis-sold a car finance deal, it’s important to take action to gather the right evidence so you can put forward a strong claim. Here’s a guide on how to go about it and ensure that you have the best chance of success.
Understanding Car Finance Mis-Selling
Before diving into how to gather evidence, it’s useful to understand what constitutes a mis-sold car finance agreement. Mis-selling occurs when the finance provider, whether that’s a car dealership or a broker, fails to provide you with a deal that suits your needs or misrepresents the terms of the agreement. This can include a range of issues such as:
- Being sold the wrong finance product – If you were sold a finance product that wasn’t right for you, such as a Personal Contract Purchase (PCP) when you could have benefitted from a Hire Purchase (HP) deal, this could be grounds for a mis-selling claim.
- Unclear or misleading information – If the terms of the deal weren’t clearly explained to you, or if you were not made aware of key elements like the total cost of the car, interest rates, or any hidden fees, then it may be considered mis-selling.
- Inappropriate lending – If you were granted a loan that you couldn’t afford based on your income or financial situation, this could indicate a mis-sell.
Gathering evidence is the key to proving that a mis-selling occurred, and the more detailed and organised your evidence is, the stronger your case will be.
Step 1: Review Your Paperwork
The first step in gathering evidence for a car finance mis-selling claim is to go through all the documentation you were provided with at the time of the sale. This includes any contracts, terms and conditions, loan agreements, and promotional material that you received. Pay close attention to the following:
- The finance agreement itself: Look at the key terms laid out in the agreement, such as the interest rate, monthly payments, the total amount repayable, and the length of the agreement. Were these terms explained to you in a way you could easily understand? Did the finance provider highlight the total cost of the loan, including any additional fees or hidden costs?
- The terms and conditions: These should outline the specific rights and responsibilities you have as a borrower, as well as any cancellation terms, penalties for missed payments, and early settlement options.
- Pre-contractual information: Any promotional material or brochures that were provided before you signed the deal can also be used as evidence. Were you made aware of the full cost of the finance, including any hidden charges or high-interest rates?
Keep copies of all relevant documents, and note any inconsistencies or issues that might support your claim that you were mis-sold the finance deal.
Step 2: Analyse Your Affordability
A common reason for mis-sold car finance is if a customer is sold a deal that they cannot afford. This is particularly relevant if you were granted credit when it was clear that you did not meet the required financial criteria. To gather evidence here, you will need to assess your affordability at the time the loan was agreed.
- Your income and expenditure at the time of the deal: Think back to when you signed the agreement. Did the finance provider carry out an affordability check? Were they fully aware of your income, outgoings, and any existing debts? If not, this could be grounds for a claim.
- Affordability assessment records: If you have any documents or records showing that your affordability was assessed incorrectly or that you were pressured into accepting a deal you couldn’t afford, make sure to keep them. This includes emails, phone records, or any documentation showing a lack of appropriate checks.
- Your current financial situation: If the payments on the car finance deal are now unaffordable, it may support your claim that the finance provider failed to assess your finances properly at the time of the deal. Having a record of missed payments or being behind on your loan can help your case.
Step 3: Record the Sales Process
In many cases of mis-sold car finance, the issue arises from how the sale was presented to you. If you feel that the salesman misrepresented the deal or failed to provide sufficient information, documenting this is crucial. Here’s how you can gather evidence of the sales process:
- Your recollection of the conversation: Write down everything you can remember about the sales process. Did the salesperson explain the finance terms clearly, or were they vague? Were you pressured into accepting a deal quickly? Any notes you have on how the deal was presented will help.
- Witnesses: If anyone was with you during the sale, ask them if they remember any details that may support your claim. They can serve as a witness to the way the deal was sold to you and whether it was done in a transparent manner.
- Sales calls or emails: If the dealership or finance provider has followed up with you by phone or email, keep a record of any correspondence. This could be useful if the provider made promises that were not delivered, such as offering a lower interest rate or claiming that a particular finance product was the only option for you.
Step 4: Assess the Terms of the Finance Deal
If you were sold a finance product that doesn’t meet your needs or wasn’t fully explained, this could be grounds for mis-selling. For example, you may have been sold a Personal Contract Purchase (PCP) plan when a Hire Purchase (HP) deal would have been more suitable for your situation. Understanding the key features of the deal you signed up for will help you determine if it was appropriate.
- Payment structure: Examine how the payments were structured. Were you made fully aware of how much you would pay over the term of the agreement? Did you know how much interest you would be paying overall? If any of this was unclear or misleading, it may support your claim.
- End-of-term options: Were you informed about your options at the end of the agreement? In some cases, customers may not fully understand that they won’t own the car outright at the end of a PCP agreement unless they make a balloon payment. If this was not explained to you, it could be grounds for a claim.
Step 5: Seek Expert Advice
Once you’ve gathered all the evidence you need, it’s time to seek expert advice. Car finance mis-selling can be a complex issue, and having a professional guide you through the process can significantly increase your chances of a successful claim.
A specialist in car finance mis-selling, such as a solicitor or a claims management company, will be able to review your case, advise you on the best course of action, and help you compile the necessary documentation. In many cases, these professionals work on a no-win, no-fee basis, which means you won’t have to pay upfront fees for their services.
Step 6: Make Your Claim
Once you have all the evidence and expert advice, you can begin the process of making your mis-sold car finance claim. The first step will typically be to contact the finance provider directly. You can write a letter or email outlining your concerns and the evidence you have gathered, requesting a resolution. In many cases, the provider will investigate your claim and may offer a settlement.
If the finance provider refuses to resolve the issue or if you are unhappy with their response, you can escalate the matter to the Financial Ombudsman Service (FOS). The FOS can investigate the complaint on your behalf and, if necessary, order the finance provider to compensate you.
Conclusion
Gathering evidence for a car finance mis-selling claim requires careful attention to detail and persistence. By reviewing your paperwork, analysing your affordability, documenting the sales process, and seeking professional advice, you can build a strong case. If you believe you were mis-sold a car finance deal, don’t hesitate to take action. With the right support, you can seek compensation and rectify any financial losses caused by a mis-sold agreement.
If you’re uncertain whether you’ve been mis-sold car finance or need help gathering evidence for your claim, visit reclaimingcarfinance.co.uk for expert advice and support.
