Finance

Car finance expert Pete Ridley says more than a million drivers could be owed £1,500 or more

The FCA’s ongoing investigations into car finance agreements have raised alarming concerns about the fairness of car finance deals across the UK, with tens of thousands reporting they were wrongly overcharged. Now Pete Ridley, a car finance expert from Car Finance Saver, is urging car owners to take a deeper look at their financing deals, with millions potentially owed thousands in compensation.

The FCA’s inquiry into car finance agreements has revealed that, before January 2021, numerous lenders allowed brokers to adjust the interest rates they offered to customers for their car finance. Known as a ‘Discretionary Commission Arrangement’, this policy meant that the higher the interest rate on a financial agreement, the more commission a broker could earn.




Mr Ridley said: “This meant brokers were incentivised to increase the interest rate and therefore overall cost of their customers’ loans. While this practice was banned by the FCA in 2021, this investigation highlights valid concerns over whether customers were given sufficient information when securing finance deals, or have been overcharged to help line brokers’ pockets.”

What it means for drivers

With the Finance and Leasing Association (FLA) providing £51 billion in car financing in 2022 alone, including more than two million new finance agreements, the FCA’s investigation could potentially lead to a tasty windfall for millions of car owners across the UK.

Mr Ridley said: “This isn’t just a minor discrepancy. We’re potentially talking about over a million drivers who’ve been unfairly treated in their finance deals, with 10,000 already having come forward.”

While it will be some time before there will be a clear picture of the financial compensation car owners could be owed, similar cases have seen drivers get on average £1,500 for their claim.

Mr Ridley said: “Given the nature of the DCA policy, there is also the slim possibility that some car owners may get their entire loans paid back. This is if the FCA deem their brokers have acted unfairly enough – most will likely only get back their loan interest or broker’s commission, but it’s still worth looking into.”

How do I know if I’m eligible?

The FCA’s investigation is focused on those who were sold car finance before 2021, so only apply if:

  • You used car finance to buy a car before January 28, 2021, (including hire purchase agreements, such as Personal Contract Purchases).
  • Your lender and broker had a DCA.

You won’t be eligible if you bought a car on or after January 28, 2021, or used a car hire agreement such as a Personal Contract Hire.

Mr Ridley said: “Check your agreements sooner rather than later. If you suspect you’ve been overcharged, there could be a strong compensation case, so it’s best to get in before a final decision is made by the FCA.”

If you think you have been overpaid, Mr Ridley suggests you take the following steps:

  1. Review the fine print of your finance contract for any inconsistencies or lack of clarity regarding fees and interest rates.
  2. Gather relevant documentation and evidence of potential overcharges and any transactions related to your car finance deal.
  3. Reach out to your finance provider for clarification of said charges.


Once you have your case, the FCA advises filing a complaint with your loan provider first, taking it to the Financial Ombudsman if this doesn’t work.

Mr Ridley said: “It’s not just about reclaiming what’s yours. It’s about holding financial institutions accountable for transparency and fairness.”

For more information about the investigation, visit the FCA website. If you’re still unsure, the team at Money Saving Expert has put together a free car finance reclaim tool to help drivers understand if they could be owed money and help tackle a claim.


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