Car finance claims are a complex and often misunderstood aspect of consumer rights. Many car owners find themselves in the difficult situation of needing to claim against a car finance agreement, yet are unsure of the process or where to begin.
In this detailed guide, we’ll walk you through the avenues available to make a car finance claim — whether through a solicitor, claims management company, or DIY submission — without providing direct advice.
By understanding these routes, car owners can empower themselves with knowledge that may lead to a more informed and successful resolution.
The Importance of Car Finance Claims
Understanding the necessity of asserting your rights in a car finance agreement is the first step in navigating the claim process. These claims are crucial for consumers who have been mis-sold finance packages, insurance products, or vehicles that do not meet the promised standards.
As the automotive industry evolves and car finance models become more intricate, it’s pivotal for car owners to comprehend their rights and options. Making a claim can lead to financial compensation, as well as rectifying the problem with the vehicle or finance agreement itself.
Given the recent announcement by the Financial Conduct Authority (FCA) that they are conducting a probe into possible financial misconduct by companies such as Barclays Partner Finance, Blackhorse and Santander prior to 2001, it’s more important than ever for consumers to be aware of their rights and options when it comes to car finance claims.
Making Sense of Your Claim Options
Given the gravity of car finance claims, it’s essential to grasp the main channels available to consumers. These include leveraging the expertise of SRA-registered solicitors, engaging with FCA-licensed claims management companies, or embarking on a DIY approach. Each option has its own set of benefits and considerations, which we’ll explore below.
Through SRA-Registered Solicitors
Solicitors regulated by the Solicitors Regulation Authority (SRA) can offer a comprehensive understanding of legal claims. They are equipped to handle complex cases and can provide tailored advice specific to your situation. SRA solicitors often have significant experience with consumer rights and can navigate the legal system effectively.
The primary benefit of using an SRA-registered solicitor is that they can handle the entire process on your behalf, from gathering evidence to negotiating with the finance company. This can save you time and stress, as well as increase the likelihood of a successful claim.
Through FCA-Licensed Claims Management Companies
Claims management companies (CMCs) are regulated by the Financial Conduct Authority (FCA) and specialise in handling claims for consumers. They have extensive knowledge of consumer protection laws and can assist with gathering evidence, drafting the claim, and managing negotiations with the finance company.
One benefit of using a CMC is that they often work on a no-win, no-fee basis, meaning you won’t have to pay any fees unless your claim is successful. However, keep in mind that using a CMC may result in a higher percentage of your compensation being taken as fees.
Through DIY Submission
Taking the do-it-yourself route means that you will handle the claim process independently. It can be a cost-effective way to pursue a claim, especially if you’re comfortable with research and paperwork.
This approach requires a significant time commitment, as you will need to thoroughly understand your rights under the Consumer Credit Act and any other relevant laws that pertain to your claim.
One potential benefit of a DIY approach is that you won’t have to pay any fees, maximizing the amount of compensation you receive. However, keep in mind that it may require a significant amount of time and effort on your part.
When to Consider Each Option
The decision to pursue a car finance claim through a solicitor, claims management company, or on your own hinges on several factors. Considerations include the complexity of your case, your familiarity with legal processes, your desired level of involvement, and the urgency of the claim. Each option has a time and place where its strengths are best suited to the circumstances.
Engaging an SRA-regulated solicitor is ideal for cases that involve complex legal issues or disputes that may lead to court action. If you want peace of mind that an experienced professional is handling all legal aspects, the expertise of an SRA solicitor is a valuable investment.
However, there is a cost associated with legal representation, so it’s crucial to weigh the potential compensation against any legal fees.
Claims Management Companies
Using a claims management company is convenient for those who prefer not to handle the claim process themselves. CMCs offer a hands-off approach and may be most suitable for straightforward cases that do not require court action. The cost of using a CMC varies, but it’s typically a percentage of any compensation received.
The downside of using a CMC is that there have been instances of unscrupulous practices within the industry. Be sure to research and choose an FCA-licensed company with a good reputation.
Navigating the claim process on your own can be appropriate for straightforward cases where extensive legal knowledge is not necessary. This option is cost-effective and offers complete control over the proceedings. If time is not a pressing concern, and you are willing to undertake the research and paperwork required, the DIY approach may be the best course of action.
However, if you feel overwhelmed or unsure of the legal aspects involved, it may be best to seek professional assistance. It’s crucial to thoroughly understand your rights and evidence requirements before submitting a claim independently.
Understanding the Process
Regardless of which path you take, it is vital to understand the general process of making a car finance claim. This typically involves initial consultations, gathering evidence, and submitting a claim. Throughout the procedure, you may engage in negotiations with the other party and, if necessary, proceed to have your case heard in court.
The first step is often an initial consultation, where your representative will assess the viability of your claim. This consultation helps to establish the strength of your case and the potential outcomes and next steps.
Evidence gathering is a critical stage of any successful claim. This can include keeping records of communication, collecting vehicle documents, and obtaining professional assessments of the vehicle’s condition.
Your chosen representative will submit your claim to the appropriate authority or court. The strength of your evidence and the clarity of your claim will help determine the success of this stage. During this time, you may engage in negotiations with the other party to reach a settlement.
Most claims go through a negotiation phase, where both parties attempt to reach a settlement without going to court. Representatives can mediate this process to ensure you receive fair compensation. Most car finance claims are resolved during this stage, avoiding the need for court action. However, if necessary, your representative will proceed to the next stage.
If a settlement cannot be reached, your claim may proceed to the courts. Legal proceedings are the final step in the claim process, where a judge will make a ruling based on the presented evidence and arguments. The cost and time commitment associated with this stage make it an option of last resort.
Types of Car Finance Claims
There are various types of car finance claims that individuals may find themselves needing to make. These include:
- Mis-selling: This occurs when a lender sells you a financial product or service that is unsuitable for your needs or that you do not understand.
- Unfair credit agreements: These are agreements that contain terms or conditions that are highly detrimental to the consumer and may be considered unfair under the Consumer Credit Act 1974.
- Irresponsible lending: This involves loans being given to individuals who cannot afford them, leading to financial hardship and potential default.
- Hidden commissions: Hidden commission claims involve undisclosed fees or commissions paid by a lender to a broker, which can result in inflated finance charges for the consumer.
While each of these claims falls under the general umbrella of car finance, they each have unique circumstances and require tailored approaches. Understanding the type of claim you are making can help determine which path to pursuing compensation is most appropriate for your situation.
Learn More: You can see more about some of the reasons you may be eligible to make a claim on our Mis-Sold Car Finance Reasons page.
Understanding Your Rights
Claiming against a car finance agreement is a significant step for any consumer. By familiarising yourself with the avenues available and the associated processes, you are taking a proactive stance in protecting your rights.
If you find yourself in a situation where a claim is necessary, remember that knowledge is your best ally. Choose the approach that aligns with your needs and circumstances, and let the process work in your favour to achieve a just and equitable outcome.