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A major investigation into car finance commission arrangements has prompted experts to warn that millions of drivers may have paid more than they should
Drivers who bought cars on finance before 2021 are being urged to check their agreements after a major investigation into how dealerships set interest rates has exposed serious issues.
Millions of motorists across the UK could have unknowingly paid more than they should when financing a vehicle, because some dealers were allowed to increase the interest rate in order to earn higher commission.
But following a wide investigation consumer experts say many drivers may not realise their agreement included this type of commission structure, because car finance was often arranged quickly at the dealership when people bought a vehicle.
Experts have explained customers were usually shown a monthly payment figure rather than the underlying interest rate and, under the old system, some dealers had the ability to increase that interest rate – meaning the higher the rate, the more commission they could earn from the lender.
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Many motorists also change cars regularly, meaning they may have had several finance agreements over the years without thinking twice about how their deals were structured.
Consumer law specialists say drivers who financed cars between 2007 and January 2021 may want to review their agreements – particularly if the finance was arranged directly through a dealership.
Even if the car has long since been sold, the finance agreement itself may still be eligible to review.
Another challenge for many drivers is that they no longer have the paperwork from older finance deals. But experts say it may still be possible to check whether an agreement could qualify, even without the original documents.
For motorists who have financed multiple vehicles over the years, there could also be more than one agreement worth checking.
The investigation into car finance commission arrangements is ongoing, but the issue has already prompted many drivers to start reviewing their past deals. And with millions of agreements potentially affected, consumer experts say it’s worth checking – particularly if your finance was arranged through a dealer before the rules changed in 2021.