General information about the types of motor finance complaints that exist, how to make a complaint, and where to get free help. This page is for educational purposes only.
Ask Fin is a financial education and budgeting tool. We are not a claims management company (CMC). We cannot:
You can make a motor finance complaint directly to your lender at no cost, and then refer it to the Financial Ombudsman Service ↗ for free if unresolved.
You pay monthly instalments and own the vehicle outright at the end of the agreement. HP is a regulated credit agreement under the Consumer Credit Act 1974, which gives you specific legal protections including voluntary termination rights once you have paid 50% of the total payable.
Monthly payments are typically lower than HP because you are not paying off the full value. At the end you choose whether to make a balloon payment to own the car, hand it back, or part-exchange it. PCP is also a regulated consumer credit agreement.
A long-term rental. You never own the vehicle and hand it back at the end. PCH is generally not regulated under the Consumer Credit Act in the same way as HP or PCP, which means you have fewer statutory protections.
An unsecured personal loan used to buy a vehicle outright. Because there is no direct link between the loan and the car, you own the vehicle from day one but the loan itself is subject to standard consumer credit rules.
Historical DCAs allowed dealers to set a higher interest rate to earn more commission. This is the subject of an ongoing FCA review. If you had motor finance before January 2021, you may wish to check whether a DCA applied to your agreement.
Lenders are required to check that a finance agreement is affordable before agreeing it. If a lender approved finance you clearly could not afford, this may be the basis of a complaint.
Were the key features and costs of the agreement explained clearly? Were you told about the total amount payable, the interest rate (APR), and any commission paid to the dealer? Mis-selling complaints can relate to how the product was presented.
If you fell into arrears and believe the lender did not treat you fairly (for example, by not offering a repayment plan before repossessing), this may be grounds for a complaint.
Disputes about early settlement figures, or whether the figure quoted was calculated correctly, can be raised as a complaint.
You must complain to the finance company (lender) directly before you can escalate to the Financial Ombudsman Service. Write to their complaints team. They have 8 weeks to provide a final response.
Save copies of your original finance agreement, correspondence with the lender, and any response they give. Note the date you complained and any reference numbers.
If the lender rejects your complaint, does not respond within 8 weeks, or gives you a final response you do not agree with, you can refer the complaint to the FOS. This service is free. Visit financial-ombudsman.org.uk or call 0800 023 4567.
Claims management companies charge fees — often a percentage of any refund — for doing something you can do yourself for free. The FOS handles the same complaint types. Citizens Advice can help you draft your complaint letter for free.
Section 99 of the Consumer Credit Act 1974 provides a general right to voluntarily terminate a regulated HP or PCP agreement once you have paid at least 50% of the total amount payable. This is a complex area — the rules around the condition of the vehicle and exactly what counts toward the 50% threshold vary.
Always take advice before exercising this right. Citizens Advice (0800 144 8848) or National Debtline (0808 808 4000) can explain how this applies to your specific agreement.
A discretionary commission arrangement (DCA) was a practice where car dealers or brokers could vary the interest rate on a motor finance agreement, and their commission from the lender increased when they charged a higher rate. This meant the person taking out the finance could end up paying more in interest than they should have. The FCA banned DCAs in January 2021 and is currently investigating historical motor finance commission practices. This is a rapidly developing area — check the FCA website and financial news for the latest information.
Potentially, yes. The FCA has paused the normal complaint handling timelines for some motor finance commission complaints while it investigates. If you complain to a lender about commission and they do not resolve it to your satisfaction, you may be able to refer to the Financial Ombudsman Service (FOS). Time limits can be complex in this area — seek current guidance from Citizens Advice or check the FCA website for the latest position on complaint timescales.
No. The Financial Ombudsman Service is free to use and handles the same types of motor finance complaints as claims management companies (CMCs). You can complain directly to your lender yourself, and if they do not resolve it, refer directly to the FOS at financial-ombudsman.org.uk. Ask Fin is not a CMC and does not handle complaints on your behalf. Always explore the free FOS route before paying any third party.
Section 99 of the Consumer Credit Act 1974 gives you the right to voluntarily terminate a regulated hire purchase (HP) or personal contract purchase (PCP) agreement once you have paid at least 50% of the total amount payable. This is a general legal right — however, the rules are complex and there may be conditions around the condition of the vehicle. Always get advice from Citizens Advice or National Debtline before exercising this right, as individual circumstances vary significantly.
If you are struggling to afford repayments, contact your lender as soon as possible. Under FCA rules, lenders must treat customers in financial difficulty fairly and consider options such as payment deferrals or reduced payment plans. You can also contact StepChange (0800 138 1111), National Debtline (0808 808 4000) or Citizens Advice (0800 144 8848) for free, regulated debt advice.
Hire Purchase (HP): you pay in monthly instalments and own the car at the end. Personal Contract Purchase (PCP): lower monthly payments but a large optional final payment (balloon payment) at the end to own the car, or you can return it. Personal Contract Hire (PCH): a long-term rental — you never own the car and it is returned at the end. HP and PCP are regulated credit agreements under the Consumer Credit Act, which gives you specific rights. PCH is governed differently. Which product you have affects your complaint and termination rights.