The car finance mis-selling scandal is currently everywhere, with motorists queuing up to claim a share of what could be billions of pounds in compensation.
Now, finance guru Martin Lewis has issued an important update when it comes to car finance scandal claims.
The Money Saving Expert said he expected an update in July after the UK’s Supreme Court heard a case at the start of April, which many hope the outcome will determine whether they receive compensation.
Financial providers have been accused of using discretionary commission arrangements (DCAs) to increase interest rates on motor finance.
Did you get a car, van, motorbike on finance pre 28 Jan 21? Millions are owed £1,000s due to a NEW hidden commission scandal.
— Martin Lewis (@MartinSLewis) February 8, 2024
Watch full show at https://t.co/Rg3IsM8atz
Free complaint tool at https://t.co/nivrD7gRYd pic.twitter.com/zd4QhlPAWt
Around two-and-a-half million people have now put DCA claims in.
Addressing the scandal on his Martin Lewis Money Show on Tuesday (20 May), Mr Lewis said: “The people in the know are telling me the decision will be in July.”
What is the car finance mis-selling case?
The majority of cars sold in the UK are bought with finance agreements. These loans enable drivers to pay a deposit and then spread the cost of a new vehicle over several years.
It was discovered that car dealers, acting as loan brokers, earned a commission based on the interest rate charged to the buyer for Personal Contract Purchase (PCP) and Hire Purchase agreements. These cover about 40% of all car finance agreements.
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The higher the interest rate charged to the consumer, the more commission the dealer made.
Car dealers were incentivised to make loan agreements with higher interest rates.
The practice, known as discretionary commission arrangements (DCAs), has left many drivers paying hundreds and even thousands of pounds more for their vehicles.
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