How to complain if you’ve been mis-sold car finance

1 Gather evidence that your car finance agreement was mis-sold

Has your car lease turned out to be more expensive than you thought? Or have you been caught out by charges or a hefty final payment?

You could have been mis-sold car finance and be able to challenge fees or make a claim if any of the following apply to you:

• You were given misleading advice by a car dealer For example, if payment amounts or the terms of your finance agreement were not made clear at the start of your lease.
  
  Car dealers can hurry through their explanation of how finance works, or make them seem more attractive to encourage you to take out a lease.
• You can’t afford the payments If you’re struggling to cover your monthly payments and you can show the money was lent to you without proper affordability checks being made, you could complain against your finance provider. If successful, you may be able to pay back your debt in a reduced amount. In some rare cases, debt has been written off.
  
  If your circumstances have changed, such as you’ve been made redundant, the finance company must give you manageable options for repayment or cancellation of the lease.
• Your final payment is more than you expected Depending on the kind of lease you have, your final payment may be bigger to cover the cost of any damage, excess mileage or other expenses.
  
  If you have a personal contract hire lease, your final ‘balloon’ payment might be more than you were told it would be. Extra charges might also have been added to the final payment that you didn’t know about.
• A car dealer used hard-sell tactics and you felt under pressure to buy For example refusing to let you leave until you buy it, using scare tactics to convince you, or using guilt to force you to buy it - like telling you they'll lose their job if you don't.

2 Make a complaint to your finance company

Write to your finance company explaining how you feel misled, and what you’d like them to do about it.

The Financial Conduct Authority (FCA) - which regulates financial services and markets in the UK - states that financial products and services must be sold to you in a way that is fair, clear and not misleading.

Include any supporting evidence you may have including contracts, promotional flyers or emails from your car dealer.

3 Appeal to the Financial Ombudsman

If the finance company rejects your complaint, you can report them to the Financial Ombudsman Service (FOS), who will investigate the issue independently. They’ll look into whether your finance company has followed the rules.

If they find you’ve been mis-sold, they could recommend the finance company reduces or scraps the fees they’re charging you.

4 Go to small claims court

If the ombudsman also rejects your complaint, you could look into taking your finance company to the small claims court. 

Bear in mind that this route is only for claims up to £10,000, and you’ll only be successful if the finance company are found to have broken the law. We’d recommend getting some legal advice before starting a small claim.