Martin Lewis warns millions of UK car owners to claim now for £1,100 average payout

If you’re one of the 80% to 90% of UK car owners who purchased their vehicle on finance, listen up, as according to Martin Lewis, you could be owed thousands.

Back in January, the Financial Conduct Authority launched an investigation into potential mis-selling of Discretionary Commission Arrangements (DCAS) in car finance policies.

Although a ruling won’t be until May next year, the Money Saving Expert founder says this scrutiny is seeing more customers than ever successfully claiming compensation if they’ve overpaid without knowing.

Millions across the country could be entitled to money back in what Martin has described as ‘the new PPI’, with the average payout estimated at £1,100 – a sum not to be sniffed at.

You may be eligible if you bought a van, campervan or a motorbike on finance between April 2007 and January 28, 2021, provided the vehicle was for personal use and through a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement.

Between 40% and 74% of car finance policies taken out during this time had DCAs included, allowing finance firms to increase interest rates at any time without telling the customer, with dealers and brokers earning huge commissions hooked to the interest paid.

While these agreements have since been banned, people who had a DCA prior to this and weren’t made aware may have been unfairly charged – and you can only find out if you were by putting in a complaint.

To do so, Martin is now urging owners use MSE’s free tool, and to swerve ‘no win, no fee’ services which could take 50% of any payout you get.

His theory that a time limit for claims may be introduced for the FCA’s investigation closing – in which case only those that complained ahead of that date will receive compensation.

‘The key to all this is to get a complaint in ASAP,’ said the finance guru in his latest newsletter. ‘The sooner you log a complaint may mean the less chance you’ll be excluded.’

He added: ‘Once your complaint is logged, then it’s a waiting game until the FCA rules in May 2025.’

Since MSE launched their tool in February, a staggering 2.3 million complaint letters have been sent.

The refund rules apply even if the original user has now passed away, as the relevant executor or beneficiary can claim on their behalf.

Already paid off the vehicle? Or don’t own it anymore? That doesn’t matter either: you can still make a claim and get that money firmly back in your pocket.

Why not give it a go.

This article was originally published on July 3, 2024.

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