Refunds for unaffordable credit are usually simple – you get a refund of interest paid and, if you still have the account, only have to repay what you borrowed with no added interest. And your credit record is cleaned.
That is the basis for car finance affordability complaints too. But here there is an extra factor – what happens to the car?
When you make a car finance payment, some of it is interest and the rest goes towards buying the car. This affects car finance refunds in some situations.
In the last two years, the Financial Ombudsman (FOS) has upheld an increasing number of car finance affordability complaints. So there is now a good track record of what FOS decides in various situations. Some of these may surprise you…
This article looks at the various types of cases so you can tell what may happen in your case.
I’ll use the Ombudsman’s term redress for the compensation you may get – that covers all the elements, not just a cash refund but a balance reduction and repairing your credit record.
Contents
Important car finance articles
Two articles about car finance affordability complaints:
- Were you sold a car on unaffordable finance? looks at what an affordability complaint is. It is a test about your situation when you bought the car. You can win a car finance affordability complaint if you still have the finance, if it has been repaid in full, if you handed back the car, or if the car was repossessed. You can also win if you made every payment on time!
- How to make a car finance affordability complaint has practical details and a template you can use. It is the same template as for other large loans.
And if you still have the finance, these articles look at your options if you can’t afford to keep paying it:
- Can you manage your current car finance payments? you have to carry on making paying while an affordability complaint goes through, and they often aren’t speedy. So you must decide how you can manage the immediate problem of not being able to pay the finance.
- Voluntarily Terminating your car finance This may not be what you want to do but sometimes you don’t have another practical alternative, so find how it works.
What redress do you get in the four main situations
In all cases
In all the following cases, the Ombudsman normally also says:
- if you are getting a cash refund, then you should be paid 8% simple interest on that amount
- any negative marks on your credit record (missed payments, defaults) should be removed.
A) Car finance repaid
This is the simplest case. Often you will have owned the car at the end of the agreement, but it also includes cases where the car was used in part exchange for another one, sold by you to settle the agreement, or settled by you early eg if you took out a cheaper loan or inherited some money or were given a gift.
The redress here is the same as you would get if another type of loan was found to be unaffordable – you get a refund of interest and charges you paid on the finance. And of course you keep the car!
Here is a typical FOS decision:
As I don’t think Moneybarn ought to have approved the lending, I don’t think it’s fair for it to be able to charge any interest or charges under the agreement. Miss C should therefore only have to pay the original cash price of the car, being £4,999 (of which Miss C paid £700 as an initial payment). Anything Miss C has paid in excess of that amount should be refunded as an overpayment.
And another one:
To settle Ms P’s complaint Oplo should do the following: · Refund any payments Ms P has made in excess of £7,127, representing the original cash price of the car.
Here is a FOS decision where Moneybarn tried to argue that as the car was sold to settle the agreement, they should not have to refund the settlement amount. FOS disagreed and stayed with the standard approach of refunding all interest and charges on the finance.
B) You handed back the car or the lender repossessed it
This covers several sorts of cases – Voluntarily Termination (VT), Voluntarily Surrender (car handed back but not VTed) and Repossession by the lender. The distinguishing feature is that the customer lost the car and the car finance lender ended up with it.
Very often the customer has paid less than the amount borrowed, so the usual approach of refunding interest won’t help. In this decision, the Ombudsman explains why the standard approach isn’t suitable for these cases. The very large numbers in that example are because the car was a new BMW, but the same principle applies to all cases where the lender ended up with the car.
We usually say that the borrower needs to pay back the credit amount provided and that the lender should refund any interest, fees and charges that the borrower paid… So, in this case, this would mean Mr F paying back the £168,436.00 he was originally lent.
But I don’t think that a refund of the interest fees and charges is appropriate here. The car was taken back relatively soon after the agreement started and a settlement on this basis would mean Mr F paying for the full amount lent for a car he had for a few months, without owning the car at the end.
Instead FOS’s typical decision is:
- you should pay a fair usage charge for each month you had the car;
- you get a cash refund of your deposit plus the monthly payments you paid plus any payments made after you no longer had the car, minus the fair usage charge;
- any balance still owing is cleared.
Here is one decision where the original car finance payments had been £266 a month:
Miss P also appears to have paid about 14 payments under the agreement and post-termination she has been paying in monthly amounts to reduce the arrears. I also need to take account of the fact that Miss P had fair use of the car for about 19 months… I think the simplest way to put things right here is to ask Specialist Motor Finance Limited to refund everything that Miss P has paid towards the agreement (including what she has paid post termination of the agreement), less a deduction for usage which I think can be fairly set here at £175 per month.
There is no way to predict what FOS will set the fair usage charge at. It is usually significantly less than the monthly car finance payment. In this decision the Ombudsman talks about setting the fair usage charge:
I note that Mr W did have use of the car for around four months, so I think it’s fair he pays for that use. But I’m not persuaded that monthly repayments of over £220 a month are a fair reflection of what fair usage would be. This is because a proportion of those repayments went towards repaying interest. There isn’t an exact formula for working out what a fair usage should be. In deciding what’s fair and reasonable I’ve thought about the amount of interest charged on the agreement, Mr W’s likely overall usage of the car and what his costs to stay mobile would likely have been if he didn’t have the car. In doing so, I think a fair amount Mr W should pay is £110 for each month he had use of the car. This means Moneybarn can only ask Mr W to repay a total of £440… Anything Mr W has paid in excess of this amount should be treated as an overpayment.
But the fair usage charge is related to the cost of the car, so if you have paid a large deposit then the fair usage charge may not be any less than the monthly repayment.
C) Car finance still running & you have paid MORE than the amount borrowed
Here the typical redress decision is:
- you should only have to repay what you borrowed, with no interest or other charges added;
- any amounts paid over this should be refunded;
- the balance still owing is cleared and the car is transferred into your name.
One Ombudsman decision in this situation is:
As I don’t think the finance should’ve been approved, I’ve thought about how to put Mr H back in the position he would’ve been in if this hadn’t happened. So I think that Moneybarn should cancel the agreement. But, because Mr H had already paid Moneybarn more than the original amount of the finance, he should be allowed to keep the car. So, Moneybarn should… refund everything Mr H has paid above the original finance amount of £5,590.
Here is another one:
1st Stop Finance [Oplo] have said that Mr D has already paid more than the cash price of the car and Mr D still has the car and has continued to make the payments under the agreement. If that’s the case, I think it’s fair to allow 1st Stop to retain the payments up to the cash value of £13,899 in respect of the fair use Mr D has had from the car. Mr D should be allowed to keep the vehicle and anything he’s paid beyond the cash value should be returned to him.
D) Car finance still running & you have paid LESS than the amount borrowed
This tends to happen early in a car finance agreement. There haven’t been many FOS decisions in this type of case because often the borrower is unable to keep paying so the car has already been VTed, handed back or repossessed.
The typical redress decision is that:
- the lender should take back the car;
- any remaining balance you owe should be cleared;
- you should have a refund of your deposit plus the payments you have made less what a fair usage charge per month would be.
So FOS is making the same decision it would have made if the borrower had voluntarily terminated the car, see (B) above which looks at what this fair usage charge is. Here is one example:
I instruct Oodle Financial Services to put things right by doing the following: · Cancel the agreement with nothing further to pay · Collect the car at a time and date suitable for Mr T at no cost · Reimburse Mr T all repayments made towards the agreement along with any interest, fees or charges. Oodle can retain from this amount £250 a month prorated from when Mr T took the agreement to 8 December 2019.
NB I haven’t seen a case where the borrower was close to having repaid the price of the car, so I don’t know what FOS would decide in a marginal situation. I would argue for the borrower being allowed to make a few more payments and retain the car.
Only (D) is likely to be a problem for borrowers
Cases A, B and C are straightforward. The redress you get from winning these cases will normally considerably improve your situation.
But if you are currently in case D – you haven’t yet repaid what you borrowed – you may have hoped to be able to keep the car and only pay the remainder of the purchase price at an affordable rate. I haven’t yet seen a FOS decision where that is the result.
If you are in this situation now and you really need to keep the car, decide if it’s possible to delay a complaint. This would involve carrying on making the payments until you fall into the case (C) situation.
Ideally you would delay until you have repaid the amount borrowed and are clearly in case C. But it will take several months for a FOS decision to go through, so you could plan on making an affordabilty complaint several months before that point.
Read Can you manage your current car finance payments? which looks at your options. If none of these will work, you may have no better alternative to VTing the car now and making an affordability complaint at the same time.
Inflation – can you cut your IVA payments ?
Is your energy DD not just high but wrong?
Can you really offer just £1 to a debt?
Sarah says
Hi Sara, thanks to you and your help on this page, I have had a successful affordability complaint uphelpd against MoneyBarn without having to go to the ombudsman too! They are due to refund me an amount just under £1000 and I wondered if you knew how quickly or slowly they are paying out? They sent the outcome letter a week ago and I replied submitting my bank details so just curious if you or anyone else had any experience with payment timeframes at the moment. Thanks
Sara (Debt Camel) says
Not recently, they were quite slow 6 months ago but I think it may have improved.
Karen says
Hi!
I am in the same boat – did you get your refund yet? I am due just over £2,000 and sent my bank details by return on 14th Feb. Just phoned there & the helpful person I got said the complaints team can take up to 28 days but she would hope 7-10 working days.
Hoping for a fast payout.
Thanks
Lisa says
Just won my case with moneybarn. I have paid off 9k of a 20k loan 500 was a deposit I paid to garage so total was 9498 I got on loan but that totalled to over 20k with interest. They have offered to either I pay 1400 left what was price of van ( they haven’t included my 500 deposit to take of the original cost so should be 900 left to pay ) or hand back and they will calculate redress. What am I looking at getting back if I hand the car over ? I’ve paid 500 deposit and over 6600 in interest. I’m struggling to pay so to do the 900 and keep isn’t in my best interest I have use of another car so don’t need the vehicle. Any help would be appreciated
Sara (Debt Camel) says
I suggest you ask them what the redress would be as you need to know this to make a good decision. Point out that your £500 deposit needs to be taken into account in either scenario.
Sarah D says
Good morning.
I purchased a van for my husband around April 2021. The total cost to repay was £22.5k. I stated at the time that the monthly repayments were too high for me but it was suggested that once we sold his other van, I could pay off some of the finance to bring down payments from £375 pm. He never got much for his van so could not do this. We struggled to make payments which got us into a default. As my hubby needed his van, to save them taking it away, we have, for the past year been paying £450 pm to help pay off arrears and save him loosing his van. This in turn has caused us to fail into arrears with our gas and electricity.
We still have £11.5k to pay and I wonder if I could launch an unaffordable complaint based on this and what I would be likely to get back if upheld.
Many thanks in advance for your support.
Sarah. 😃
Sara (Debt Camel) says
how large are the arrears? how much have you paid so far?
Sarah Docherty says
The arrears are now down to £900 and we have paid circa £11.5k
Sara (Debt Camel) says
Can I ask if you or your husband has other debts – credit cards, loans, overdrafts etc?
Sarah Docherty says
Yes we both have credit cards. Now closed unpaid catalogues
Sara (Debt Camel) says
Are you making payments to the credit cards? Because it would be better to stop paying them, or only make a token payment, so you can pay the car finance and also get the arrears cleared.
Also look at making affordability complaints to the cards and catalogues, see https://debtcamel.co.uk/refunds-catalogue-credit-card/
yopu need to have cleared the arrears and alos have paid more than the amount you borrowed to the car finance – if you complain beafore that point you may win the complaint but still have the car repossessed.
Sarah Docherty says
Thank you! So when I have paid the amount the van cost I.e. 14k which leaves around 7k in interest then could I make a complaint?
Sara (Debt Camel) says
yes, at that point you would be safe – if you win the complaint they couldnt take the van
Alan Cockburn says
What happens if you’ve bought a van. Paid more than half. But handed it back , but also. Used my old van at £2000 trade in as deposit. Would I get the £2000 back ??
Also bought a car paid back in full. Then traded the car in. With £5k equity used that against anther hp. Would I get that back ????
Sara (Debt Camel) says
The deposit or part-exchange value is taken into account in the refunds.
The van example comes under case (B) in the article above.
The second one – are you still paying the finance?
Craig D says
Hi there, I have just heard from the investigator at FOS looking into my complaint. He said it looked as if my affordability complaint would be upheld but he had to do some final calculations and checks.
He said if it is upheld (assuming finance company agree) that I should get back my deposit and amount of repayments less a fair usage charge and interest would be added at 8%. Does this sound correct?
The finance started in Dec 22.
Deposit was £4,476
Monthly repayments are £650
Is there any way to roughly calculate what the redress may look like, even a ballpark number?
Thanks
Sara (Debt Camel) says
What has happened to the car?
Craig D says
Hi Sara
I still have the car and payments are all upto date with no arrears. I understand they would collect the car and cancel the agreement if all upheld.
Craig
Sara (Debt Camel) says
So handing back the car, wiping the remaining balance. refunding the deposit and repayments less a fair usage charge does sound standard.
The amount you get will depend critically on what the fair usage charge is. What was the rate of interest on the car?
Also did you have car finance on other cards before this one?
Craig D says
Hi Sara
No cars prior to this one.
Car cost was £44,476 less deposit £4476
Interest rate was 11.9%
Overall amount was £59,190
Optional final payment was 24,200
Geoff says
Hi there. Had this back from specialist motor finance.. rejected refund but have admitted they could have done more, any thoughts?
took over a year for payment issues to arise, upon reviewing how we assisted with the management of your account we appreciate that there could have been more assistance or options that we could have discussed to gain a better understanding of your financial circumstances when entering into payment arrangements.
Taking this into consideration, we would like to offer to offer £150.00 as a gesture of goodwill as a full and final offer. If you are satisfied with this offer then we would be grateful if you could complete in full and sign the form below confirming that they accept this offer in full and final settlement of your complaint, returning it to the address at the top of this letter, or to customercare
Sara (Debt Camel) says
Were the payments proving hard right from the start? Dod you have to borrow more to cover them, or use a credit card more for essentials?
Geoff Godsell says
Pretty much.. had split up with my partner who owned the car and I worked 30 miles away so had to act fast. Was just surviving by cutting back on essentials and family help
Sara (Debt Camel) says
In that case you may well win this complaint at the Ombudsman.
What has happened to the car? When did the finance start?
Geoff Godsell says
I still have the car. Paid off almost. In arrears though. 2018
Sara (Debt Camel) says
ok so its good to get a claim in within 6 years from the start date as it makes complaints faster and simpler at the ombudsman. If it is nearly paid off you should not be at risk of losing it, but how large are the arrears? And could you clear them?
Geoff Godsell says
1300,, not at the present time. I’ve rejected the offer and submitted to the ombudsman
Sara (Debt Camel) says
if you have other debts, I suggest you should be prioritising clearing these arrears. I have not seen a lendere tryy to repossess a car in this situation where you have complained but theoretically they could try.
Greg says
Hi Sara
I recently made an affordability claim with specialist motor finance Ltd for a car loan. It has all been paid off now. In total £15073 paid, when the value of the car was just £7119.. I submitted the claim a few weeks ago and they asked for bank statements for previous 3 months prior taking agreement which I have sent most of (hard to get exact dates as that acc is now closed down) but you can clearly see I had a gambling problem, ridiculous amount of gambling transactions proof of using safety net credit to take out more credit, and also if they did a proper credit check they would have seen I was behind with my priority bills and also took out extra credit cards.. my question is do you think this is a strong case or shall I prepare something else to help me with my case I’ve never done a case like this before. Other than amigo one which I have recently had upheld. Any info would be great thanks
Sara (Debt Camel) says
how long ago was this taken out?
Greg says
October 2019. I used a template from your website to do my claim
I finished paying it off last year, I actually sold the car to pay the rest of the finance off
Sara (Debt Camel) says
From that is sounds like a good claim, but often good claims do have to go to the Ombudsman.
Getting the bank statements and downloading a current copy of your statutory Credit report ( https://debtcamel.co.uk/best-way-to-check-credit-score/ ) is sensible preparation. You should ba belt o get bank statements going back 6 years even from a closed account
Kiki says
My credit with Moneybarn was £6951. I have paid to date £9126. I can’t afford to pay the £231 monthly anymore and wish to make an affordability complaint but I don’t want to loose my car. I have definitely paid more than I needed to, as the purchase price was £8500 and I put down £1500 cash. should I complain to Moneybarn or go straight to the ombudsman, also if I don’t make this months payment will it effect my credit score. what’s the best way please Sara, thank you. 🙏🏻
Sara (Debt Camel) says
You cannot go straight to the ombudsman, you have to complain to Moneybarn first.
Can I check that the car repayments caused you problems from the start?
Do you have other debts as well? Because if you need to keep the car, you have to carry on paying it while a complaint goes through. The normal option for car finance, which is a priority debt, is to pay less or nothing to non priority debts such as credit cards, catalogues, loans etc. This could be through you making payment arrangements or using StepChange for a Debt Management Plan.
Kiki says
My loan was originally refused due to affordability by Wilson’s. Then Wilson’s got me the high interest loan with Moneybarn. It was tight from day one but I paid it every month, but I was in a car accident no fault of my own, and needed to get a new car as I am a care worker and need it for my job. With bills prices increasing the £231 I pay for my car would help towards food. I’m on UC and am in full time work, I have payment plans on other debts £5 per month , and my rent and council tax are all up to date. Just need to know where I stand regarding this car payment as I have already given them over the purchase price. What would I say to them when I write to them ? Thank you Sara.
Sara (Debt Camel) says
ok so this sounds like a good complaint. The article above has the link to my page with a template letter to use: https://debtcamel.co.uk/refunds-large-high-cost-loans/
The fact you have repaid more than you borrowed means that if you win the complaint you will be able to keep the car – which is good.
But it doesn’t mean you can stop paying while the complaint goes through – and many of these have to go to the ombudsman so can take quite a few months. If at all possible, you need to carry on with the Moneybarn payments.
The UC you get this month should be increasing. Are you getting council tax support?
How many other debts do you have – you could reduce the £5 you are paying them to £1 or even nothing if things are very tight.
If you have no other option, you could ask Moneybarn to be able to pay at a lower rate. What would you do if you hadn’t come across this page about affordability complaints?
Kiki says
Hi Sara
I have recieved a final response from Moneybarn stating they are unable to uphold my request based on the fact that they did all the relevant checks prior to entering into the agreement and I agreed to the high interest rate by signing the contract.
Do I still have grounds to forward to the FO ? I am and will continue to pay my monthly payments for the car. Thank you.
Sara (Debt Camel) says
Yes. You are complain about affordability, not that the interest rate is so high.
Kiki says
I will continue making the payment while I make the affordability complaint. Thank you for your feedback Sara, you have helped me so much in the past with catalogue interest refunds. If I had not come across your page 2 years ago I would be in a dark place. I will continue eating baked beans on toast for the next few months till I get and outcome from Moneybarn. I did ask them a year ago if they would reduce my monthly payment and they said no. Even if I paid off some of the outstanding balance they said the monthly payments would have to stay the same. I have that in writing from them. X
Kiki says
Hi Sara
I’m a bit disappointed today. I recieved a response from the FO regarding my car finance. I explained it was unaffordable from day 1. I have paid £3000 more than the amount borrowed and yet they say they do not feel Moneybarn we’re in the wrong lending to me and that because I have paid every payment every month that does not show to them that I cannot afford it. I have another £4000 to pay until the agreement ends. How can I respond to argue my case. Any advise is so much appreciated.
Sara (Debt Camel) says
Have you supplied your bank statements and used them to show the difficulty you have had?
if the investigator doesn’t change their mind, ask for the case to go to an ombudsman.
Kiki says
Yes I supplied the 3 months they requested. They said that Moneybarn was not at fault as even though my salary went down a year after getting the car finance it was fine at the time of purchase and I signed a contract agreeing to the 36 apr interest rate. I was and still am on universal credit when I got the car and paying many debts but needed a car for my job, I was in the care sector. I have also been waiting these last 4 years for social housing. I have since changed bank account so I can only provide the last years bank statements if I do request forwarding to the ombudsman. But will give it a try as I having to loose at this point. Thank you.
Sara (Debt Camel) says
You can get bank statements going back 6 years from closed accounts. That is what you need. Tell your investigator you are going to do this and it may take a few weeks.
Greg says
Hi Sara. I did comment a few weeks back about SMF. They sent me final response letter very very detailed in my app details. Kind of didn’t mention the pages and pages of gambling statements I sent in as proof, however I calculated interest to be 7k not including 8% stat. After a lengthy letter they have said something about a £25 buffer to my finances should have been added and therefore are offering me £1,100 in compensation as a full and final offer I have 21 days to accept. My question is do I just accept the money. Or go to the ombudsman. If they decline my complaint I won’t get anything ?
Sara (Debt Camel) says
what date did the car finance start?
Greg says
2019. I have the full letter but obv cannot post it on here. It was an affordability complaint. If you scroll up you can see my comments made on your website 6th March
Sara (Debt Camel) says
So this is under 6 years old, there is no reason why the Ombudsman wouldn’t look at it.
Do you think SMF’s reply fairly addressed your complaint? It doesn’t matter how detailed their reply if they didn’t do that.
You have to choose between pocketing the 1,100 now and getting a lot more if the case upheld by the Ombudsman. But if it isn’t up held, you may not get anything. That’s why some firms make very low offers, so you will just accept it.
Greg says
Yeah this is my predicament. I think from the letter they have outlined my entire application my wages from my payslips. The apr rates. The fact I did keep on top of most of my payments and settled in full early when I took an amigo loan out to pay of the car finance and other debts. So all in all everything they have included on the letter is correct. The only thing they haven’t included is how bad my gambling was and if they would have even given me the car loan. If they seen there beforehand. By law do they have to check bank statements or just credit check and payslips ? Because the credit check came back with 5 defaults over 8 months old. And 9 active credit agreements with 7 up to date. I still think this is very poor. Do you think they are offering low because they know I would probably get it accepted by FO. £1100 is a lot when I didn’t expect anything but I don’t really know what to do..
Sara (Debt Camel) says
why would you take an amigo loan to clear car finance that would have been cheaper?
Greg says
Sorry it wasn’t to clear it. It was to pay for repairs and other loans. Then I sold the car to settle the finance. I have decided to accept their offer instead of raising to ombudsman. Don’t want to risk not getting anything at all
Suzanna says
Hello, my partner just received a response from Moneybarn regarding affordability complaint for a loan he took back in 2020. They upheld the complaint and offered to pay back just over £1k. We weren’t able to keep up with the payments originally and just after 11months we asked for them to take the car back which they did but then they issued us with £6k bill to pay back. We weren’t able to make any payments for that for a while at the time and they sold the debt to moorcroft. Since then my partner has made an arrangement with moorcroft to pay back £100/month which he has been doing for the past couple of months. My question if moneybarn upheld the complaint does that mean that the 6k will be written off and also if we accept the payment that they are offering of 1k does that mean we accepted their response and we won’t be able to refer the compalin further to ombudsman?
Sara (Debt Camel) says
if moneybarn upheld the complaint does that mean that the 6k will be written off
Well you need to check this with money ran. But yes it should mean the balance is cleared and any negative marks removed from your credit record.
also if we accept the payment that they are offering of 1k does that mean we accepted their response and we won’t be able to refer the compalin further to ombudsman?
Yes – so you need to ask about clearing the debt. And have a think about how good the offer is.
Can I ask if he paid a deposit for the car? How large? What were the monthly payments in the finance? How much did he pay them before the car was taken back? Since them? And how much to Moorcroft?
Suzanna says
Hi Sara, thank you for your response. There was no deposit paid. And the monthly payments were £305. I think one or two payments were missed during the 11 months of having the car. In the final response letter to our complaint they said we paid in just over £2.8k of which they deducted £1.6k for vehicle use. They added 8% simple interest which leaves just over £1.2k of payment to us. My partner paid 8 x £100 to moorcroft so far. I am guessing we will not be bale to get back this £800 since it was paid to moorcroft directly?
Sara (Debt Camel) says
Can you add up what he paid to Moneybarn?
Because the redress should take into account what you have paid to the debt collector…
Suzanna says
It would be £3.6k in total but it looks like the £800 paid to moorcroft was not included in the final letter summary…
so he paid £2.8k whilst having the car and then £800 to moorcroft so total of £3.6k but they didn’t include that £800 in the final letter – just the £2.8k. They included a separate sheet with statements of all the payments made and it looks like out of £305 paid every month, approx. £230 was towards interest payment. Are they able to deduct the ‘vehicle usage fee’ if most of what was paid went towards the interest payments?
Joe says
Hi is it possible to make a claim even though it was a number of years ago now I feel ill with cancer and was unable too work while undergoing treatment Moneybarn were not sympathetic & wouldn’t help me in anyway they repossessed the car got a ccj ( this now off my credit file) and when they sold it I was responsible for the loss which I’m still paying too moorcroft too this day
If this is still possible how do I go about it?
Sara (Debt Camel) says
Can I ask if the payments were affordable at the point you took the car finance out? So you were already in difficulty before your health stopped you working?
The CCJ was while you were undergoing cancer treatment? Did you defend the case? What date was the CCJ?
Craig W says
Wonder if you can help. Investigator at FOS wrote to me on 1st March to say he was going to be upholding my affordability complaint against BMW. He said he had written to them giving them 2 weeks to respond, to which he heard nothing so wrote to them again on the 18th March giving them another 2 weeks. On the 3rd April still nothing so giving them a further 2 weeks. Apparently BMW have resourcing issues so they are giving them more time to respond! How long generally is acceptable, as this seems to have been dragging on for ages now. Or is it better this way than having to go to the Ombudsman?
Sara (Debt Camel) says
It is better to try to get this sorted out now rather than having to go into the queue for an Ombudsman.
Stuart Hancox says
Hi
I don’t have exact figures but basically the Ombudsman has ruled in favour of my unaffordable hire purchase used to buy car. The original agreement was 60 months, I handed it back roughly half way through maybe 4 months or so either side. He has stated to Specialist Motor Finance that any amount piad over the actual car price should be refunded plus usual 8% interest. As I handed it back how would the calculation work as I am assuming this calculation would be used for agreements that have been paid in full?
For information to other SMF initially stated when I complained directly to them that there was no basis for a complaint and the credit was affordable so it may be worth pursuing with the Ombudsman if others get a negative response from lenders.
Thanks in advance
Sara (Debt Camel) says
Do you still owe a balance? Did you pay a deposit?
Stuart Hancox says
Hi
I paid no deposit and there is no balance it was back in 2018, the vehicle was auctioned after I handed it back.
Sara (Debt Camel) says
I suggest you go back to the adjudocator and say the car was handed back, and you understand in this situation the normal redress is a refund of all payments made less an amount each month for fair usage.
Stuart Hancox says
Thanks Sara, I have messaged explaining that. I will update when its all complete
Stuart Hancox says
Hi
So after many many emails the Senior Investigator at the FOS has said I am due no refund at all. Basically the car cost £10,414 and over the 30 repayments I made a total of £9,434 in payments. He has ruled that any amount over the cash price of £10,414 should be refunded and has stated as I have paid less than the cash price I am due no refund at all. Can this be right?
Sara (Debt Camel) says
I am double checking – this is from an investigator, not an Ombudsman?
Stuart Hancox says
Hi
Yes this is a senior investigator. Thanks
Sara (Debt Camel) says
OK so you should ask for this to go to an Ombudsman if the investigator will not change their mind. The point you should make clearly is that the redress they are suggesting is what would be appropriate if you still had the car. But you do not – so the approprtae redress is a refund of the payments you mad e LESS a fair usage amount for the 30 months (or however long) that you had it.
Stuart Hancox says
Hi
Thanks for the advice, I went back to the investigator who looked at the case again. He has now changed it to a full refund minus a fair usage charge pwr month as you suggested it should have been. My payments were £314 a month minus £220 a month fair usage meaning I should get 30x£94 in redress with the 8% interest per year. I am just waiting for SMF to agree or escalate to the Ombudsman, thanks again for your advice.
Leeanne C says
Hi Sara, looking for some advice on where I would stand on an affordability complaint to Moneybarn. Agreement was taken out Aug 21 and first payment of £435.15 paid Oct 21. Purchase Price was £16,087. I paid 3k deposit from the trade in of my other vehicle taking the amount of credit to £13,087. At the time my previous car was starting to involve costly repairs I wanted to trade in whilst it was still worth something however with a less than perfect credit rating I felt I had no option to agree to these crazy monthly payments. I fell into arrears April 22 which I cleared and then again Oct 24 which I have cleared half of and still one payment in arrears but continuing to pay every month. I have calculated I have repaid 31 repayments totalling – £13,489.65 plus £3k deposit and one month arrears owing. Would I have to clear this one month arrears before submitting my complaint? I’m concerned about not keeping the car after paying so much but have paid the credit value back? Thanks in advance
Sara (Debt Camel) says
Are you overpaying a bit each month to get the arrears down? What are the rest of your finances like?
Leeanne C says
Hi Sara, Not at the moment as i am unable due to finances. I recently had council tax arrears that have been brought up to date and a small amount of rent arrears, all other credit limits are close to maximum with minimum payments being made each month.
Sara (Debt Camel) says
I think you need to ask for a payment arrangement on some of the cards and catalogues. Say you have arrears on car finance and rent that you need to clear. And ask for the interest to be frozen.
Gina says
Hello,
FOS upheld my complaint to money barn and asked that i get refunded what i paid in excess of the amount of the car which was £12138 and the 8% simple interest from the year of overpayment to the settlement. How is the 8% simple interest calculated? And how long is the wait to receive the refund- i sent my bank details 13th May.
Thank you
Sara (Debt Camel) says
It is 8% per year.
Do you know how much extra of 12138 you paid? When did the finance end? how much were you paying a month?
they are supposed to pay you within 28 days
Gina says
Yes so I paid £3983.60 over the £12138, the finance was due to end January 2026 and I was paying £426.20 pm.
Sara (Debt Camel) says
so you have been paying up until recently?
Jade says
Hi,
I took out car finance with black horse in 2014, the car was for sale for £6000 I believe, maybe £7000. The loan total was £9600. I was a student at the time so I had my student loan which was paid each term to cover living expenses and I earned around £600-700 a month to make up the shortfall of what my loan didn’t cover. The car finance cost me £200 per month and many times, I paid this late due to having to wait for my next student loan payment to be paid.
Black horse have since confirmed that a discretionary interest rate was added to this loan (which I’m awaiting the verdict on) but I believe the loan should never have been given to me due to me having poorer credit at the time. The car was paid off in 2018, have I got grounds to raise an affordability complaint?
Sara (Debt Camel) says
Yes but do you have (or can you get) bank statements going back to 2014? As if you don’t it may be difficult to prove unaffordability.
Jade says
I do have bank statements, I’ve requested them in the post. On looking at these old bank statements, I also saw that I took out over 15 pay day loans the year I got the car, some of them were from the month before I was given the car finance. Surely that should have raised alarm bells for them
Sara (Debt Camel) says
yes it should!
You have good grounds for a complaint but expect Black Horse to reject it as being “too old”. You can send this to the Ombudsman to be looked at. The ombudsman can decide whether to go back further than 6 years for affordability complaints, but if your finance finished more than 6 years ago it is less likely that it will decide it can look at this.
Kayla says
Hi please can I get some advise. :-)
I took a pcp car loan with black horse in September 2018
For £13000
At the time I had a bad gambling problem
I only started working that same month as I was out of work for about a year due to have 3 small children.
I had a win from gambling so being young and careless I got car loan/pcp
I was paying back £460 for 36 months
I kept up with the payments for about 1 year until I stopped working!
I called black horse and they didn’t care or want to help.
I did miss about 10 payments but last year I paid it off I still owe £170 to this day.
I ended up borrowing money off my parents to make the payments
I made a claim with black horse and they said there final decision was they done everything correctly and with my benifits I was receiving and wages I could afford it.
Would there be any point in going to the ombudsman?
At the time I had such bad credit I’m unsure how they even accepted me.
Sara (Debt Camel) says
Yes. Send this to the Ombudsman right away.
And get your bank statements from the three months before the finance started now – you can always get bank statements going back 6 years even from closed accounts but you need To do this now so you can get as many as possible. If you wait until the Ombudsman asks in September or October it may be harder to get jun-Aug 18 statements. But don’t delay sending the case to the Ombudsman waiting for these.
Kayla says
Thank you for replying Sara!
I banked with Halifax which is where I went through to get my loan who must partner with black horse so they was able to get my bank statements 3 months prior and 3 months after.
I have now filed but hope ombudsman will get all the information black horse have. She said she was unable to give me my statements they have.
I find it confusing why I did not win to get my interest back as the lady who was dealing with my case said I can see from your statements you wasn’t working and just receiving benefits with the 3 months prior to getting the loan.
She said with my benifits wages and money family put in I have a total of £3000 spare.
Thank you again
Sara (Debt Camel) says
“She said she was unable to give me my statements they have”
Who said this, Black Horse?
you cannot rely on being given money by your family as regular income!
Kayla says
Further investigation into your bank statements also show that we followed our lending procedures correctly on this lending issue. I spoke to you on 13 June 2024 regarding the income into your bank account and you confirmed that it was made up of benefit payments, payments from family and your wages. During your online application you have confirmed we were correct with our assessment of
This was what she added to my final decision.
Yes black horse sorry.
She said I couldn’t have them put I can go into a Halifax branch and they can get me my bank statements for a fee.
Sara (Debt Camel) says
yes ask Halifax. And they should not charge you a fee unless you are asking for an unreasonable number or making repeat requests.
FOS want these but but it can also help your arguments if you have them too.
Kayla says
if you are going to FOS then they will request your case file from us, and your statements are part of that.
That’s what black horse just sent so will I need to still get my statements? Or trust what they say and my statements will be part of my case.
Thanks Sara
Sara (Debt Camel) says
they will send FOS the statements. BUT I think it also helps for you to have a copy
Kayla says
I will pop into the bank but it’s difficult to actually find one these days. Most seem to have closed.
Thank you for you help. Hopefully it isn’t a long process but I will let you know the outcome with the decision.
Katie N says
I took out finance totaling £18,000 in June 2019, gambling was visible on my statements, I had another vehicle on finance and an attachment of earnings for utilities on my wage slips.
I fell behind on payments by £1500, Moneybarn stated they were taking the vehicle from me, I contacted them and offered to pay the arrears,they stated I either needed to pay the remaining amount of just under £11k or enter into a consent order for the arrears, I told them I wanted to pay the arrears in full at this time and they refused stating it would need to be done via consent order. In the email they stated the consent order was for £1500 with £408 costs so just under £2k. I signed the documents as wanted to keep the vehicle. They then sent this over after a complaint and the consent order was for the full amount remaining not arrears as they originally stated within the email. I made all payments in line with the consent order and 8 months later received an email stating I’d missed an Oct payment despite the payment schedule stating the payments were to start from 1st Nov They said they were taking the vehicle despite me asking for a breakdown of payments and sending a bank statement showing payments made to them in line with the schedule. They took the vehicle and sold it. This left a remaining balance despite me already paying them £8k.
They are stating I still owe over £5k.I put in an affordability complaint however has anyone had any success with a consent order in place?
Sara (Debt Camel) says
Not seen a case. Let me know how this goes.
Katie N says
I have received a response from Moneybarn. They have upheld my complaint. They have agreed to refund all payments made, minus fair usage and added the 8% interest. They have also stated they will remove the agreement from my credit file.
Really happy with the outcome as I expected to get nowhere with this. So glad I found this page.
.
I am so glad I found this page as I wouldn’t have
Sara (Debt Camel) says
Very pleased they settled this without it having to go to the Ombudsman.
craig W says
Hi Sara, thank you for all the advice and information on your site. I’ve recently had a final decision from the ombudsman upholding my complaint.
Finance company to collect the car, refund my deposit and any overpayments which comes to a total of c £10k!
Couple of quick questions. Ombudsman said they would ask finance company to contact me directly, is it worth me phoning or emailing them to speed things up, they have been slow with everything so far! And I guess the 28 days guidelines is business days.
I have a direct due off on the 20th of this month so I’m assuming I’ll still have to pay this if they haven’t collected the car by then?
Thanks
Sara (Debt Camel) says
I think you are safe to stop the direct debit. If you make a payment at this point after they have done their calculations it needs to be done again… also stopping paying them may get them to speed up.
Which lender? I suggest you contact then and ask them to repossess the car as soon as possible
Craig says
Thanks Sara, it’s BMW financial services (Alphera)
Alex says
Hi Sara,
I’ve recently had a favorable outcome from the FOS for an unaffordability claim against Blue motor and they have sent me an email with the redress however, just to be sure, would you mind taking a quick look to see if the redress amount is correct please.
Car original value: £12,500
Deposit : £2000
Capital amount : £10,500
Monthly Repayments at: £287.75
Term : 60months
Redress:
–£4,765.00 – Refund any payments Mr XX has made in excess of £12,500, representing the original cash price of the car – Total Paid £17,265.00 – difference £4,765.00
–£324.02 – Plus 8% simple interest £324.02 (£4,05.03 gross – £81.01 tax)
I appreciate you time
Thank you
Sara (Debt Camel) says
How many monthly payments did you make? any final settlement or was their a balance still owing?
Alex says
Apologies Sara,
Correction to my last statement, 60 months payments made from march 2019 to march 2024 , no settlement letter and no balance still owing.
Thank you
Sara (Debt Camel) says
In that case BMF have done the wrong sum…
They should either take the total amount your paid (deposit plus monthly payments, so 2000 +17265 ) less the price of the car (12,500) = 6765
OR they should do the slightly different sum taking the total amount you paid to the loan (17265) and taken away the amount of the loan (10500) – 6765. The same result.
But what they have done is mixed up the two, taking the amount you paid to the loan (ignoring the deposit) less the price of the car.
So you should be getting £2000 more. Plus a bit extra 8% because of that.
Go back to them and point this out. Also tell your adjudicator that BMF have got the sum wrong…
Alex says
Thank you for looking into this Sara,
In light of your calculation, this error looks quite substantial! I’ll make BMF and the adjudicator aware of this and get back to you on the outcome of this.
(what a rollercoaster…)
Again, can’t thank you enough for this
Alex says
Hi Sara,
Quick update, I’ve had a response from the adjudicator and she agrees that BMF have calculated the redress wrong. She has ordered BMF to refund the deposit along with the 8%.
Thanks for all your help and support Sara!
Sarah says
Hi. My husband had car finance with First Response taken in Sept 2017. He struggled to make payments every month and skipped priority bills to ensure the finance was paid and we had the car but there was the odd month where he could not pay.
It was 48 month contract and still has £1100 to pay but no payments have been made since 2021.
We attempted a complaint directly to them but their response was that it would not be upheld as we made payments every month.
Any suggestions please???
Sara (Debt Camel) says
what happened to the car?
Sarah says
We still have the car
Sara (Debt Camel) says
when did you complain to them?
Have they stopped asking him to pay?
how does this show on his credit record?
Sarah says
He complained about 1 year ago.
Yes we have not heard from them.
Default
Sara (Debt Camel) says
Well this is too late to take that complaint to the Ombudsman – that needed to be done within 6 months. And you can’t make the same complaint twice.
What date is the default?
Matt says
Hi there
I’m guessing I’m too late for my car finance issue. I bought a car on finance in 2006 with 5 years of monthly payments of £180 which I struggled to pay but was desperate for a car and sick of bangers breaking down all the time.
Anyway, I was 22 years old and when I tried to get credit for the car, my credit rating was poor and it wasn’t possible to buy the car at I think £8k, so the dealership reduced the price of the car to be in my credit range and topped it up with additional interest so they could get the sale.
Should I try making a complaint? I remember it very well as it was my first car that I bought myself on finance and was quite nervous as to whether I could afford it, however they assured me I could.
Sara (Debt Camel) says
I think this will be very difficult. Unless you have details about your finances (bank statements?) from the time it is likely to be impossible.
Have you looked at making complaints about this and later cars on finance asking if there was any discretionary commission? See https://debtcamel.co.uk/car-finance-commission-get-refund/. This first car may be a problem even for that – pre 2007 agreements may turn out to be excluded, but that decision hasnt yet been made by the FCA. So I suggest you ask the question now about the commission.
sam says
Hiya.
I borrowed £6.5k from SMF in 2022 and the repayments are £165 per month for 60 months. I’ve been wanting to make an affordability complaint for a while but I’d like to keep the car so am trying to pay off the principal amount first. I’ve currently paid just over £5k and at the current rate I’d have paid off the principal in 9/10 months.
If I were to complain now is there a chance I’d have to hand the car back if there is still an amount owed on the principal, even if the majority has been paid? Say if I still owed £1000 on the principal and the complaint was upheld, would I likely need to hand the car back?
Sara (Debt Camel) says
Yes there is a chance. I can’t say how large.
Do you have other problem debts at the moment? Any you have defaulted on but are paying?
Stef Hornby says
Hi Sara
I bought a £9000 car. Have to pay Moneybarn back £18000. Gambling problems , payday loans frequented before getting this finance. Been in arrears and had 22 payment plans fail early on. Currently zero arrears and only £5000 left to pay so pay well over 1/3. Im looking at putting in an affordability claim but dont want to loose my car? what do you suggest? My affordability now is much better than it was when I took out the loan
Sara (Debt Camel) says
how much have you paid so far – 18000-5000=13000?
Stef says
Car Value was £9000. So borrowed £9000. Had to pay back £18,000.
I’ve paid 13,000. And have around £5000 left
I have one monrhs Arrears of £300 which I’m expected will be paid off before I even get a complaint response.
Thanks x
Sara (Debt Camel) says
get those arrears paid asap! Do not complain to Moneybarn while you have arrears. After that you will be fine, just keep up the monthly payments so you stay out of arrears.
Stef hornby says
Sorry I’ve put them in now as worried.
Didn’t think £300 would put me at risk. I will be paying them off in full by 20th November so hopefully my complaint hasn’t been resolved then.
Even if they did want to repossess car they would need to serve a default notice first and get a court order wouldn’t they?
Sara (Debt Camel) says
I have heard rumours about Moneybarn trying to repossess cars when a complaint is made, so I always prefer people not to have any arrears. Have they ever sent you a default notice before?
Stef says
I’ve just downloaded 3/4 months statements before I got the car. They show a vast amount of the following
Gambling transactions:
Stars ( PokerStars)
Skybet
LCI (Ladbrokes)
Betfred
Betfair
Bet60
Irish (lotto)
Debts/payday loans:
Bw legal
Mr Lender
Fernovo
Cashasap
Capital 1 Europe
Creation consumer
Each statement I’ve sent actually shows me spending more money than was incoming into my bank. I’m hopeful I have a golmod chance at redress.
Thanks Sara
Stef says
I’ve already complained. I’m worried now.
I intend on paying arrears in full in 3 weeks ? Surely they can’t just take my car on the back of having £300 Arrears?
Sara (Debt Camel) says
I hope not, I just prefer people to know they are totally safe.
Sara (Debt Camel) says
I hope you have also made affordability complaints about the payday loans!
Stef says
I’ve never had a default notice and always sorted my arrears.
I’m going to pay arrears in full by Sunday.
Be very suprised if they try and repossession my car before then for £300 arrears.
Also don’t they have to get court order because of paid well of original value?
John says
is car at risk if a complaint is lodged? if you have paid off 75%
Sara (Debt Camel) says
75% of the value of the finance? or of the amount you borrowed? are there any arrears?
Sam says
Hi. I am currently in Category D and 6 more monthly payments from being in Category C. Do you think it would be worth making an affordability complaint now or wait a few more months just to be safe? I’m worried the finance company may request the car back if I have a small amount left to pay. Can they request the car back whilst the complaint is investigated by the FOS? By the time I get a response from them I think I would have cleared the principal. Thanks
Sara (Debt Camel) says
They can’t repossess the car if you are making the normal payments.
Do you have any arrears?
Sam says
Nope no arrears
Sara (Debt Camel) says
So the only risk is if you stop paying (which you shouldn’t) or if the lender/FOS decisions go through very very fast.