Was your car finance unaffordable?
The FCA, who regulates car finance lenders. and the Financial Ombudsman (FOS) say:
a loan is only affordable if you can make the repayments on time, without hardship and still meeting your other commitments.
That means you need to be able to pay all your other debts, your normal household bills and expenses as well as the new car loan payments.
You may have made your car finance a top priority as you don’t want the car to be repossessed. As a result you may have had increasing credit card balances, more loans or got behind with bills. That means even though you kept making the payments, the finance was not “affordable”.
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Affordability checks
A lender should have checked you could afford the car finance. This may mean checking not just your credit record, but also your income and expenses as well.
These checks have to be “proportionate”. If you have got a great credit record and a good income and are only borrowing a small amount, the lender isn’t going to have to look in great detail to be confident you can afford it.
But with a poor credit record, or where the repayments will be a large proportion of your income, better checks are needed. The FCA rules don’t say exactly what has to be done, but a lender often can’t rely on what the customer says their income and expenses are. Other ways to check include:
- your credit record shows what you are paying to other debts each month;
- there are national average figures for some expenses, so your estimate that you spend £60 a month on food or nothing on clothes isn’t realistic;
- the lender could look at payslips or bank statements to be sure.
These checks are often inadequate
The regulator thinks some car finance lenders are not checking properly for affordability. In 2019, the FCA said:
Here is an extreme case ‘Car payments are ruining our lives’ where a 23 year old student with a part-time job was sold a 21k Audi on finance, with apparently no affordability checks at all.
But it’s probably more common that a quick and inadequate check was done.
A car finance expert makes a lot of excellent points in this article: The car industry need to be more honest when selling car finance. He says:
It’s time for the car industry to do better, even if it’s to save customers from themselves.
“Affordability” is a test of your situation when you took the finance
The car finance company may have done a good assessment of affordability. At the start, you may have been able to manage the loan repayments.
Then something went wrong – perhaps you had your hours cut, or you split up with your partner. Or rising bills in 2022 mean what was manageable before isn’t any more. Here it’s not the lender’s fault that the car finance is now unaffordable and you won’t win an affordability complaint. Read Can you afford your car finance payments? which looks at your options in this situation.
But should the lender have seen that the loan was too expensive at the start if they had looked properly when you applied for the credit?
In this case, you can make an affordability complaint to the lender.
How to make a car finance affordability complaint
The affordability rules for car finance are the same as for other loans. So you can follow the approach and use the template letter for an affordability complaint in this article: How to ask for a refund from large, bad credit loans.
The template letter in that article asks for:
- a refund of the interest on the finance;
- for the remaining balance to be repaid at an affordable rate; and
- for any negative marks to be removed from your credit record.
If you have other serious complaints about the car, such as poor quality, you can add those into the standard affordability complaint letter.
A lot of lenders reject even good complaints. So don’t be depressed if this happens – just send it to the Financial Ombudsman – the process is all described in the above link.
What happens if you win the complaint?
If you win an affordability complaint for a normal loan, you get the interest refunded and if the loan is still running, your balance is reduced. It’s more complicated with car finance complaints.
You may wonder what happens if your car was repossessed and you had paid little or no interest?
If you still have the car finance, will you be able to keep the car?
See Car finance affordability – what you get if you win a complaint which looks at the different situations and what the ombudsman usually decides. It has some links to Ombudsman decisions – including one for a brand-new BMW!
Still have the car? You must keep paying the car finance
These complaints may take many months. You will have to keep up the loan repayments during this time, or your car may be repossessed.
Read Can you manage to pay your car finance? which looks at your options when you don’t think you can keep on paying while the complaint goes through.
Other sorts of car finance claims
€ar finance commission – cases won at the Ombudsman
In January 2024, 2 major cases were won at the Financial Ombudsman were people had been charged to high an interest rate on car finance in order to increase the commission the car dealer got.
See Car finance commission scandal – can you get a refund? for details and how to start a claim.
But if you think you may have a good affordability complaint it’s probably worth trying that first, as in an affordability complaint you get all the interest refunded, but in a commission complaint you would only get some of the interest back.
“Dieselgate” – a totally different sort of claim
You may have seen ads saying you may be able to get £,000s back as diesel cars were mis-sold because they produced more harmful emissions than advertised.
MSE has written a good article on these claims, with a list of the law firms you can use and what they charge. This is not a complaint you can sensibly try to do yourself. I have no idea how likely a payout is and it may take a long while.
Get interest refunded from large loans
Which debts are top priority?
How to end your car finance early
Rachael says
Hi Sara
Can I still make a complaint even if my final payment of car finance got included into a DRO.
Thanks
Sara (Debt Camel) says
has your DRO finished? Did you make that final payment and keep the car?
steve says
Hi, I need some advice with regards to car finance i got from Billing finance. A month after i got the car i went a couple of days late due to a job change and i received a letter from the finance company what i thought was aggressive demanding payment in which i had already made payment online before receiving letter.
The letter insinuated that i would do something to car and its not my property and it made me feel like i was doing something illegal to the vehicle in which i wasn’t. I have now received another letter stating they have terminated my agreement before a complaint i had with them was completed, Yet again another aggressive letter
” Your agreement has now been terminated and the full outstanding balance on your agreement
is now due.
We would like to speak to you to discuss how your balance can be reduced.
You are now in possession of the vehicle without our consent, and we
require its return.”
I feel they are now saying the car doesn’t belong to me and i have now stolen it as i dont have the permission of Billing finance.
I have sent a complaint to FOS for irresponsible lending and unaffordable as no checks whatso ever was done they didn’t ask for a breakdown of incoming or out goings, bank statements etc all they wanted was my wage slips and driving licence. I received final response this morning with regards to checks made
steve says
As part of our investigation, we carefully reviewed the results and data obtained, as part
of this assessment and from the program. These checks included:
Verifying your declared income and assessing effective disposable income using
12 months of Current Account Turnover (CATO) data.
The verification recognised your declared income as an under estimation of your
income.
Using CATO data to check for recent income shocks, or changes in account
turnover.
There was no income shock or decrease in account turnover.
Applying a boundary to the effective disposable income when assessing the
affordability of the potential contractual monthly installment.
Factoring in the potential contractual monthly installment (subject to approval).
Confirming your living situation.
basically all online from my credit file but i feel this is totally inaccurate. Any help and advice would be greatly appreciated as i have no idea what to do going forward.
Sara (Debt Camel) says
So you were in arrears for 2 days and since then you have not been?
The “reply” – was that from the lender or from FOS?
When was the car finance started and will you manage to carry on with it or have you no chance of doing this?
J says
Hi I’m not sure if I have a claim against oodle or not. I took a loan out for £18k with them they have charged £17k ish in interest. I still have £24k to pay off and my car is only worth £10/11k. I had bad credit from being in a financially, and emotionally abusive relationship where my partner used me and left me having to sell my home and in debt
Sara (Debt Camel) says
It’s outrageous interest but that isn’t quite the same as being unaffordable.
When you took The finance out, could you mange To make the repayments and also be able to pay your other debts, bills and living expenses without being left short or borrowing more?
Do you still have this finance?
J says
Hi still have the finance.
Yes I had a number of debts unpaid debts.
I have made a complaint and they are asking for copies of police reports and medical records
Sara (Debt Camel) says
Do you need to keep the car? Because it doesn’t sound as though you have repaid the amount you borrowed so far, in which case the car may be repossessed if you win the complaint.
J says
No, I don’t need to keep it. Although I do need a car.
All I’m really after is for the interest to be lowered to a more reasonable amount. The car is only worth half of what paid for it so with interest I’m -14k in neg eq!
Sara (Debt Camel) says
Well see how this goes. But reducing the rate of interest to a more reasonable level is not one of the approaches the Ombudsman normally adopts.
J says
I’d be happy to let the car go in that case. Do you think it is worth a complaint and failing any co-op from Oodle, the FO? Thanks
Sara (Debt Camel) says
What other option do you have? This seems like your best way forward from what you have said. but I would expect this to have to go to the ombudsman.
R says
Hi Sara.
I put an un affordability claim in with blue motor finance and they have responded via email asking me for bank statements prior to the sale of the finance which was 2019 so they can conclude the complaint. Does this sound promising or is this a generic type thing they have to do. Shouldn’t they have asked for bank statements at the time of my application rather than now putting a complaint in? My bank statements show exactly what i wrote in the original complaint ie several creditors and gambling. Are they asking for the bank statements to agree with me or for what reason are they doing this at this stage?
Many thanks in advance.
Sara (Debt Camel) says
I suggest you send Them – they prove how unaffordable the finance was also. Also they will be needed if you go to the Ombudsman. You can get statements even from closed accounts
R says
I have sent them and ive also called them for an update to which they said they are reviewing the evidence. Does it sound likely i will win this case directly with them giving my bank statements show it was unaffordable (i was living in an overdraft for many years)
Sara (Debt Camel) says
They mY just ask everyone.
HX says
Hi Sara – my husband took out PCP finance for a car in Dec 2018. He put down (or rather on a credit card) £2k deposit and the capital amount was £12.9k (total repayable £16.9k). The monthly repayment was £204/month. By July 2020, he p/x the car for another car (which we also put in an affordability complaint with that lender).
The FOS has upheld the complaint and has said:
As I don’t think CA Auto 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. Mr X should therefore only have to pay the original cash price of the car, being £14,9K (which includes the warranty sold). Anything Mr X has paid in excess of that amount should be refunded as an overpayment.
To settle the complaint CA Auto should do the following:
• Refund any payments Mr X has made in excess of £14,K, representing the original cash price of the car. It should add 8% simple interest per year* from the date of each overpayment to the date of settlement.
• Remove any adverse information recorded on his credit file regarding the agreement.
Do you know how the refund will be calculated what is it likely to be?
Thanks Sara!
Sara (Debt Camel) says
How many monthly repayments did he make?
What was the p/x amount paid to settle the PCP?
HX says
Hi Sara – I think it could be 17 payments made (+/- 1 or 2 months). The p/x settlement figure was £8641. Looking at it now, I’m not sure it wasn’t HP vs PCP.
Sara (Debt Camel) says
You should be able to tell from your bank statements how many payments you made.
Assuming it was 17, then you paid in total 2000 (the deposit) + 3468 (17 lots of 204) + 8641 (px) = 14109. That is only 109 more than 14k. And its less than 14.9k I suggest you double check the numbers as on that you will get little or nothing back.
HX says
Thanks Sara.
I read off the adjudicators comments, she has the start date wrong. It was 28 months paid in total so by my calcs: (£5712 + 2000 + 8641) – 14900 (plus 8%, however that is calculated)
Sara (Debt Camel) says
ok that makes more sense. the refund will 8% per year from July 2020 so about 32% extra
J says
Thank you- do you think I would have a good chance with the ombudsman? I know we can’t say for sure I’m just wondering if it is worth it
Sara (Debt Camel) says
At the point you took the finance you had bad credit and unpaid debts. Oodle should have checked closely to make sure it would be affordable for you. This complaint is well worth sending to the Ombudsman if Oodle reject it.
Steve says
I also currently have a complaint in with the ombudsman against Oodle and my experience so far is the investigator is absolutely useless. They have ignored alot of my essential credit commitments despite being given the proof multiple times. I gave clear calculations of my income and outgoings to make it easier for them and it still wasn’t looked at properly
In my opinion they are too busy to look at cases properly before making decisions and seem to decide in favour of Oodle by default
If you look at all the previous decisions made by the ombudsman for complaints against Oodle, for some reason they seem massively biased and are not acting impartial when it comes to Oodle at all…..Very strange
Sara (Debt Camel) says
looking at published ombudsman decisions gives an odd view as you don’t see the majority that settle at the investigator level.
Jan says
My other half is having similar issues with regards to Oodle, the adjudicator originally sided with Oodle and asked if he wanted it to go to an ombudsman for final decision, he said yes and she asked one question about them having agreed the finance the day before they conducted the credit check, he provided more clarity on this along with evidence, a few weeks later she came back and said her decision was the same, he pointed out this was just one of many points of his complaint and that he thought she was sending to the ombudsman, a few weeks passed again and she’s confirmed she’s passed it on.
Steve says
If the ombudsman shows as little effort as the investigator has in my case I’ll be very unhappy
She originally made her decision or ‘view’ based on incorrect calculations she made and even now is missing out huge amounts of monthly credit commitments for no reason and no explanation
I also stated multiple times that my ‘application details’ which Oodle have tried to say is my original application has my correct date of birth on it but has my current age, when the application would have had my age at the time of application 5 years ago not my current age. The investigator felt it okay to bypass this comment despite me mentioning it 4-5 times
Definitely biased in my opinion so far but will update when I hear from the ombudsman themselves
J says
First fill me with much confidence!
I’ve had final response from Oodle and they too have ignored my concerns. They seem to think that £17k in interest is the norm!
Zoey brooks says
Hello,
I have just had my complaint not upheld by the adjucator and I have requested to be take. Forward to ombudsman. I quote what was written in conclusion.
“ Whilst I don’t disagree that the lending may not have been completely affordable to you, I have to consider the information available to Black Horse, rather than the information they didn’t see, or didn’t find out. “
I have two issues one being this HP was more than 8 years old. The FOS refused to look into at first the. Did a complete U Turn and stated I do have ground to look in to a complaint more than 6 years old
In the conclusion the FOS keep mentioning the fact that Blackhorse did enough checks even though it didn’t verify income or check I had a job. What do you think Sara? Do I have a good case? I thought I did but was knocked down after decision. Not to upheld. Blackhorse magically appeared with a credit check and apparently a bank check which showed what was coming in but not where it was coming from.
Sara (Debt Camel) says
I don’t see why the decision to look at an over 6 year case is relevant to the decision to reject?
What information do you have about your situation 8 years ago? Bank statements? Anything else? Was Lloyds your bank? What was the interest rate?
How old were you? Was this your first car? Did you have a job?
Zoey says
Lloyds is not my bank, which is why I am confused on how a “bank check” was carried out. As I didn’t even know this was possible.
I was approved HP finance through a dealership. I never directly spoke with them, they never asked for proof or went through my income and expenditures with me. I was a 20 year student I did have bills to pay and I was using payday loans and missing payments nearly throughout the 48 month term. I was prioritising this debt and I was racking up about £4000 in overdraft and loans over those years. I provided all the proof but the case handler stuck by because “Blackhorse didn’t see this they didn’t do nothing wrong”. I have now forwarded over to ombudsman I ended up with a default but I did settled the finance by selling the car. Do you think I have any leg to stand on in regards to the ombudsman finding in my favour?
Sara (Debt Camel) says
This sounds like a lot of credit to give someone with a low income to me. If you have provided bank statements, that should help.
Zoey says
Hello Sara,
I provided bank statements and a lot of evidence. However in the end the ombudsman did not uphold my complaint stating that I can’t show financial hardship before taking out the vehicle. When I was a student, I have declined the decision and I have read that you can request a judicial review from a high court. The FOS don’t disagree that I couldn’t afford it but they state Blackhorse carried out correct checks. I have also been written to by Blackhorse stating a hidden commission arrangement was used. I know complaints are on hold till September but what is the resolution for those claims? I might just have to go that route.
Sara (Debt Camel) says
you don’t “request” a judicial review – you can sue FOS in a judicial review, but that would cost you a very large amount of money – you need professional representation in the High Court. This is not sensible for any consumer – it is the route a lender can use, where it is worth it as they care about the next thousand FOS decisions they will get, but even then it is EXTREMELY rare.
Your option if you want to go to court is to sue Black Horse in the county court. Honestly I don’t recommend that either. These cases are not simple (you would be suing for an unfair relationship under s140 of the Consumer Credit Act) and if you loose there is a danger you may have to pay Black Horses fees. If you want to do this I strongly suggest talking to a solicitor.
The timescale for discretionary commission claims is likely to be extended, you are now unlikely to get anything back this year and it may be end of next year.
Have you looked at affordability complaints against the overdraft and other loans? because they should have seen first that you had this car finance and second that you had missed payments on it. the car finance may have been the start of your problems but it is often easier to win complaints about other later types of credit.
J says
May I ask what everyone was paying in interest with Oodle?
Mine was just short of the amount borrowed and now my car is worth half of what I paid for it and still have a huge amount left to pay!
I used Flamingo finance and they told me my only choice would be Oodle.
Oodle have said the Apr was normal
Sara (Debt Camel) says
This isn’t really directly relevant to whether you have an unaffordable loan. A loan t 8% interest can be unaffordable. A loan at 28% interest by be OK.
You may well have been ripped off. But you won’t win an affordability complaint unless you can show that your monthly repayments have left you with too little money to pay your other debts, household bills and everyday expenses, without being left to short that you use more credit such as a credit card or an overdraft or Klarna to get by.
Rebecca Jones says
Hello Sara,
I purchased a car on pcp in March 2023. At the time, I was new to a job, 6 months, and wasn’t particularly in a good place. We had debt/ overdraft but it was being paid with minimal payments. Since the car, it has just got worse. The payments for the car are £405 each month, but each month since, I’ve had to use my credit card and /or overdraft to help with other bills. I’ve continued to pay the car, as I did not want to negatively impact my credit file or have it repossessed or what not.
I don’t particularly think, I was properly assessed prior to the deal, as well as the deal being completely affordable with an incredibly high apr %. The car to buy with cash was around 26k. My total amount of borrowing is £34,368, over 48 months with a balloon payment of £13500 on month 49.
Is there anything I can do? I’ve contacted the company, whom said there is simply nothing to do, the car is worth only £16.5k with a settlement figure as of today of £22300. Leaving me in a minus equity. If I wanted to hand the car back today, I would be required to pay £9370.
Regardless of the solution, I am not able to afford any and worried how this will continually impact me monthly. The car payments are nearly half of my monthly wage, along with the car insurance.
Sara (Debt Camel) says
Regardless of the solution, I am not able to afford any and worried…
not able to afford any what?
is a car essential for you?
R says
Sorry, I mean afford any solution, I can’t afford to pay the 9k to hand the car back, or pay the difference with the minus equity if I find a better car,
Sadly, the car is essential. Not necessarily that car, but a car. We have no other car in our home.
HX says
Hi Sara / do you know of anyone putting an irresponsible lending complaint for a PCH (lease car)? How does it work for a complaint like this whereby there isn’t interest as such?
Thanks
Sara (Debt Camel) says
Leases are not consumer debt, you are renting the car not taking a loan. So an affordability complaint isnt possible.
HX says
Thanks, just thought I’d check since on the FOS website it says
The rules and regulations apply to all forms of finance and this includes finance taken out at the ‘point of sale’, i.e. in the store through a retailer or perhaps car dealership. This includes credit for large household purchases like sofas, kitchens, bathrooms and car finance.
There are various ways to fund the cost of a car these days and this includes hire purchase, conditional sale agreements, personal contract purchase (PCP) and personal contract hire (PCH). While the specifics of each of these types of finance might be different, the finance company needs to carry out a proportionate affordability assessment in each case.
Sara (Debt Camel) says
Well give it a try. I would be interested to know how it goes.
HX says
I’m not sure what to ask for, as there’s no interest. Would I ask for part of the payments back and the deposit?
Sara (Debt Camel) says
There is no history here. Try asking for a refund of the monthly payment over what is “a fair usage charge” for the car.
HX says
Hi Sara – for info, I spoke with FOS and they can investigate PCH unaffordable lending. As you say, there isn’t any history here, nothing in the decisions section of the FOS website but likely if found unaffordable, then the car would re returned, deposit would be refunded and partial refund of the monthly payments (unknown how much).
I think there will be a lot of people who took out PCH whereby it was unaffordable. I don’t recall my income was checked or my outgoings….
Sara (Debt Camel) says
“partial refund of the monthly payments” that is what happens in similar HP/PCP cases – you get back the difference between what you pais an what FOS sets as a “fail usage charge”, which is why I mentioned that phrase in my previous reply.
Let me know how this goes!
Katie says
Hi, I have recently put in a complaint against a lease and they have accepted it and written off the £1500I have left (the car was returned but had some payments overdue from the last 2 months due to being made redundant – however those last 2 months were part of a renewal they made without any checks!
S says
Car finance complaint declined by company sent to FOS. Adjudicator not upheld complaint. They are taking into consideration payments made by my partner into my account as being towards household outgoings so including this as ‘income’ however the vast majority of outgoings are from her account ie rent, council tax, energy bills and they are not including these as outgoings from my account. In their calculations they have not included child maintenance payments or food costs either along with some other credit commitments.
They state
As reasonable and proportionate checks weren’t carried out for this agreement, I need to decide what a reasonable and proportionate check would likely have shown.
You also explained that some household costs were paid from your wife’s account and your wife deposited credits into your account. When looking at affordability when people are in a partnership or marriage, it is reasonable to assume that household costs are shared, and cars can be purchased for family use. As you’ve confirmed what payments have come from your wife, I’ve considered these credits into the account as it is more likely than not, they are a contribution to family household costs, and I think this would have been disclosed had they conducted proportionate checks.
Have you heard anything like this before?
Sara (Debt Camel) says
ok so why was your partner paying most of the bills and transferring you money – was this because you were struggling because of your other debt payments?
S says
She transferred money to my account to cover outgoings as well as us both borrowing money from family as I could not afford to make all the payments I had a complaint upheld for August 2022 a few weeks ago by an adjudicator for a catalogue account of £3700 yet this car finance was approved in October for £47,000 and it has not been upheld. I’m so confused 😕
Sara (Debt Camel) says
ok so go back to the adjudicator and say you wife already paid the majority of the household bills from her account – list them Say she transferred money to you and you also borrowed money from other family because you were struggling to manage with all the payments going out of the account.
Ask for this to go to an Ombudsman if the adjudicator doesn’t change their mind.
janie says
Hi Sara
Just to let you know my OH asked for his complaint against Oodle to be passed to an ombudsman for final decision. The adjudicator had previously said that Oodle had not done anything wrong when they had completed their checks, the ombudsman said he didn’t agree and believed that they didn’t carry out sufficient checks.
He went on to say that despite this he wouldn’t be upholding my OH’s complaint.
In a nutshell he accepts the real reason for my OH inability to make his payments under the agreement wasn’t due to living expenses or credit commitments and this is apparent to him when looking at bank statements. It’s also possible but not certain that Oodle may have taken a different decision had they seen the bank statements at the time. The ombudsman didn’t think Oodle could reasonably be expected to have known about the nature and extent of the gambling at the time.
Obviously this is a very disappointing result for my OH but it’s now at the end of the process.
We would like to thank you for all your help/support you have provided, it really is much appreciated.
Oliver says
So I took out a PCP finance agreement from Alphera for £38999 for a used car.
I paid a £1000 deposit and was due to have a job start this was withdrawn.
During the application process I had to share open banking access with Alphera so they could see that my income at the time came from a lodger (rent) and Job seekers allowance.
I was given the finance by them, as I am just within the 14 days cancellation what are my options. I do not wish to have the PCP finance and would like to either find another way to finance the car or to stop finance agreement and allow car to be collected (I don’t mind if there’s a small shortfall that I could manage).
Also if I raise a complaint with Alphera is there anyway the 14 day cooling off period would be paused. If the result is not positive then I would want to exercise my rights to end the agreement and possibly sell privately and settle what’s owed.
Thanks
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 about your rights to end this PCP finance and, if you do, your other options regarding the purchase of the car.
Oliver says
Hi Sara
Just to let you know Ombudsman found in my favour suggested refund of deposit proportion of monthly payments and removal of credit file.
Alphera said all checks were automated and no one checked income or outgoings.
They can still object but the report from investigator was pretty damming for finance company.
Sara (Debt Camel) says
fingers crossed they accept the investigator decision!
Lisa says
I had car finance in 2016 and it was over 4 years with motonovo so it finished in in 2020.. I struggled paying and ending up defaulting on my other debts just to make sure the car was paid and ending up going into a dmp with stepchange.. I’ve put in an affordability complaint with them which went over the 8 weeks so I contacted the financial ombudsman which I’m.waiting for someone to be assigned to the case.. Today motonovo have been intouch to say that it was time barred and they didn’t have to look at the complaint. Is this correct? Because the ombudsman have said they can look at the complaint..
Sara (Debt Camel) says
Many lenders automatically reject complaints about loans that started more than 6 years ago, but the Ombudsman can choose to go back further.
Do you have your bank statements from 2016?
Lisa says
Yes I’ve got bank statements that dated back to the 2016 which I did provide to motonovo, but they’ve just point blank said because it’s time barred they don’t have to investigate it and i knew the interest rates etc and knew how much it was going to cost . Thanks
Sara (Debt Camel) says
ok then tell FOS you want them to look at the case as you have only just found out you can complain. Explain you have your bank statements.
Lisa says
Thankyou I’ve sent it to the Financial Ombudsman I’m just waiting for it ti be assigned to someone
Mike says
Hi, I have just logged a complaint with billing finance but was wondering if I had much of a case so could do with some advice… I bought a car with them in December of 2020. The car cost be around £10,000 rising to £18,000 after interest is taken into account. Once I’d got the finance I started to struggle to make other credit payments which eventually led to me defaulting on a number of accounts and even falling behind on my car payments to the tune of around £900. I managed to get back up to date with the car payments but obviously the damage was already done with the other accounts. Would this fall into billing finance not doing adequate affordability checks? I have around £5000 left to pay on the account but the original price of the car plus around £3000 interest has already been repaid. Could I still have my car repossessed whilst the complaint is being looked into? I’m still making the payments on the car but I have fallen into areas again which I’m struggling to repay again. Any advice would really be appreciated.
Sara (Debt Camel) says
This sounds like they didn’t do enough affordability checks.
How large are the arrears?
What other debts do you have that you are paying? Have you looked at affordability complaints against them too?
Mike says
The finance I took out with them were store cards mainly. I did have a credit card that I complained about being unaffordable when they increased my credit limit and managed to get the default sum down from £1400 to £600 and that account is now settled.
The other accounts were in place before I took out the car finance and I would argue I was in a position to be able to afford all the repayments before I took the car finance out. The total defaults (5) total comes to about £1300 which I’m trying to set up repayment plans with them to get my credit file out of the toilet.
I am just worried that with my billing finance account being in arrears even though I’m making the regular payments of £310.99 a month they still may take the car given the account is in arrears. They did put me on a repayment plan but after I missed a payment they refused to let me set another plan up unless I provide them access to my bank which is a joint account and I’m not comfortable allowing that.
Sara (Debt Camel) says
Setting up a repayment plan will not improve your credit record if defaults have already happened – I suggest any spare money should be going to the arrears on the cr finance.
What sort of “access” do they require to you bank account?
Mike says
I’m not 100% sure they just stated I needed to click a link they sent and give them permission to access my bank records in order to set up a repayment plan. What would be your advice on the accounts that are already in default? Should I just try to get the arrears of the car finance in order and then look to make payments and just hope I don’t get a ccj in the mean time?
Sara (Debt Camel) says
Were you happy with the amount they were proposing?
Mike says
They didn’t offer me an amount, they refused to offer a new payment plan unless I provided them access to my bank.
Jay says
Hello,
I bought a van but couldn’t afford to continue with payments. I did try to reason with the loan company but to no avail. As such they took my vehicle but as I needed it for work I was forced to pay off the £17k in arrears via credit cards which I am still paying off now. Can I claim some of this money back?
Sara (Debt Camel) says
Was the van finance a personal loan or business?
Are you able to make more than minimum payments to the cards?
Jay says
It was personal car finance. I’m only able to make minimum payments
Sara (Debt Camel) says
if you paid off the arrears, are you still making the usual payments? or have they ended and you own the van?
Kimberley says
Hi Sara, firstly a big thank you for what you do here. It’s very informative and helpful!
I have car finance that was given to me, which I believe was irresponsible and unaffordable (I was in lots of debt, had to borrow for the car deposit etc.) – but I am unsure who I would make the complaint to as the broker was 247carfinance, but the finance is with Mann Island. Could you advise who would be best to approach about this?
Thank you!
Sara (Debt Camel) says
The complaint goes to the finance lender – their email for complaints is complaints@mannisland.co.uk
But how much did you borrow for the finance and how much have you repaid so far?
dave says
I took out hire purchase car finance in March 2022 and the car was recently VTd during summer 2024, and i have a small balance of one outstanding month to repay to get me to the 50% marker which is in progress to clear the account.
I’ve obtained a SAR from the company and the income and expenditure detail is blank for Expenditure, while the Income values recorded appear to be roughly rounded, yet accurate enough.
I’ve asked for context on why this expenditure detail is omitted from the SAR and they have confirmed they’ve provided all information that they hold about me and the agreement.
I’m not sure what to do next, does this mean they perhaps didn’t perform sufficient checks or does it simply mean they just didn’t record this detail and if so, would i still have grounds for complaint please?
Sara (Debt Camel) says
Don’t over think this – if you think it was “unaffordable” send them a complaint now and send it to the Ombudsman if its rejected.
dave says
Understood.
Can you even do that if you have VTd the vehicle (due to affordability) though, as i’ve only paid half the finance agreement off of course, meaning I haven’t actually repaid the full value of the car? The finance company auctioned the car for 4k according to the SAR documentation so technically that takes the total value they’ve received above the original sale value of the car might i add, if that is relevant.
Sara (Debt Camel) says
yes you can. See https://debtcamel.co.uk/car-finance-win-affordability-complaint/ which looks at how the ombudsman calculates a refund in a VT case – that is section B “You handed back the car or the lender repossessed it”
The amount the lender sold the car for isn’t relevant to that calculation.
Dave says
Thank you. I’ve had a response saying they didn’t assess affordability potentially:
“As your initial application was only supported by a letter of settlement from your previous finance provider.”
So will raise a complaint. Thank you for your advice.
Sam says
Hi,
Do you think that if I put in a claim against affordability, the finance company would take the car back off me? Still got quite a bit to pay off and my account is in default but worries if I put in a claim they would take the car back.
Thanks
Sara (Debt Camel) says
How much did you borrow (excluding added interest)? How much have you repaid?
how large are the arrears?
is the car essential?
what other debts do you have that you are currently making any payments to, including those with debt coll3ctors?
Sam says
Hi,
The car was purchased for £5500 I think and I am £2500 in arrears. I’ve been unable to pay much as I could really afford it from the beginning. The balance left to pay is just over £10K.
I really need the car as I work 35 miles away from home, I might be in a position to just give the car back as I might be able to get access to use another car for work.
Regards
Sara (Debt Camel) says
do you have other debts you are making payments to?
you have to be sure if you can manage without this car
with such large arrears and having paid so little to the debt there is a real risk that if you make an affordability complaint the car will be repossessed even if you win it. If it is inevitable that the car has to go back, an affordability complaint may minimise your loss, but it is not a simple way to keep the car.
Rebecca says
Hi Sara,
I commented a while back but still massively struggling but if not worse now. Every month I’m going into un-arranged overdraft and have no money for other bills.
I’ve read the article but basically, I need help on the first and next immediate steps I need to make to complain about the affordability.
Please can you advise on where I should start? And what will happen if the complaint is held? Can I pay less, hand the car back? Etc!
Thanks
Sara (Debt Camel) says
Do you have a partner?
How much are you paying a month to the other debts, excluding car finance?
Rebecca says
Hi,
Thanks for replying. Yes I have a partner and other debts are around £500 a month.
Sara (Debt Camel) says
Then if you need the car, you need to look at a debt management plan for all the other debts, that will let be able to make the payments to the car finance. You can also look at affordability complaints about your other debts.
You are so early on in this PCP deal that if you compl Now and win it is very likely the car will have to be handed back.
If you dont Need the car then hand it back now, which will leave you still owing money, but winning an affordability complaint should clear that.
Adam Savage says
Hi Sara, I put in an affordability case and have escalated to the FOS which is all fine and I feel confident about. However, whilst I was on the FOS site I had a look at previously upheld complaints and realised there was one eerily similar to my own situation – the car had engine warning lights and required ~£1k repair within the first 5k miles so not sold in the condition as expected which I believe is in violation of the Consumer Rights Act 2015 – is it worth running a second complaint for this whilst there is already an affordability complaint and would they impact each other in terms of FOS decision? In terms of the repair it was covered by an extended warranty I purchased but I did pay for inspections etc and the performance was impacted by the warning lights so every month it was operating at less than I expected.
Sara (Debt Camel) says
how much do you think you have lost with this issue?
Adam Savage says
A few hundred in inspection costs and quick fixes for the issue itself. Then probably high hundreds in finance, insurance etc that went unused when the car had no MOT and I couldn’t drive it until the issue was fixed. Car engine had reduced performance and didn’t run efficiently so used more fuel so could argue that too.
Essentially I had to work from home or borrow my father in laws car for a couple of months until the issue was fixed but I assumed that as the warranty covered the repair I didn’t have grounds for a complaint for the vehicle not being up to standard.
Sara (Debt Camel) says
probably high hundreds in finance, insurance etc that went unused when the car had no MOT and I couldn’t drive it until the issue was fixed.
you may struggle to say that these were extra costs that you incurred
Car engine had reduced performance and didn’t run efficiently so used more fuel so could argue that too.
i don’t know how you could quantify that?
david says
In July 2024 my current car was costing me too much to maintain, i was one month away from VT so decided to go ahead and took out new finance on a newer car for 11k, total payable 22k due to my poor credit status. My partner had to come onto the agreement in order to approve the lending with the finance company. my partner is on PIP. during the viewing i noticed a mileage discrepancy on the GOV website but was assured it was a key enter error only. the value of the car was not revised, my error there. i’ve tried to remedy this with the DVSA but they cannot correct it as the garage who did the error wont give me the detail as i wasn’t the registered keeper at the time of the key error (2023). the car however was advertised with matching mileage to the most recent MOT.
i asked the lender for their help to get it fixed for me and they refused, suggesting that i was implying they had clocked the car. aggrieved by this response i went to the FOS who have said the dealer or finance company have done no wrong. in the FOS response they allude to my poor credit status but say they cannot look into unaffordability because i didnt add that to the complaint, which is correct. i was originally paying £270 and the new car costs us £368 a month, my income had not risen by that value at all at time of agreement. i’m wondering if the fact they added my partner onto the agreement was to pass the finance, but my question is, would i have grounds for complaint there at all?
Sara (Debt Camel) says
I am not sure if you are asking about an affordability complaint for the old car or the new car.
You can make an affordability complaint for the old car now.
For the new car, you can make an affordability complaint but if you win, as you have not yet paid much to the finance, it is very likely the car would be repossessed. You need to have repaid at least the amount you borrowed (ignoring interest) to be sure you can keep the car.
David says
Let’s say I did and won at FOS, would a repossession cause issue with my credit status do you know please?
I.e. would it hamper me taking out a new finance deal elsewhere?
Sara (Debt Camel) says
It is normal for any negative marks to be removed if you win an affordability complaint, but I cant guarantee this always happens.
Are the current payments affordable for the two of you?
Oliver says
Hi I have had a loan with Alphera for 5 months and when I applied I was in receipt of Job Seekers Allowance and had some payments from a lodger but these went into my current account and left.
I took the loan out in August 2024 and I was initially made unemployed in March. I took the loan out as had a job offer but on the day I collected the car the job offer was withdrawn. Since then I have been trying to make payments but have slowly got into a worse situation.
They had access to my bank via open banking and never asked for payslips or confirmation of any employment. My current account was regularly at its limit and I had another loan with Zopa for £300.
I can no longer face struggling to pay £600 a month for this car whilst still being unemployed and not receiving any state benefits now.
My concern is that as I can’t afford anymore payments the car will be repossessed in the meantime. Last month I had to borrow money from family to cover bills.
———————————————–
This email has been sent to Alphera
I have asked for the following:
Given the above circumstances, I am seeking to end the agreement and request the following resolutions:
A. Cease any further payments with immediate effect.
B. Return the vehicle to Alphera Finance.
C. Clear all outstanding finance on the vehicle.
D. Refund the full £1000 deposit paid.
E. Reimburse monthly payments, adjusted to account for fair usage of the vehicle and the maintenance performed, amounting to £400 per month (£1600 in total).
F. Remove any adverse records related to this agreement from my credit file.
Now this has been raised would I be able to request a pause of payments as the next payment will be due at the start of January.
Thanks
Sara (Debt Camel) says
I had another loan with Zopa for £300.
£300 a month?
Is a car essential for you?
Oliver says
Yes sorry £300 a month about £11000 to settle.
The car is not essential at present as my partner has one and any job I am looking for is generally remote.
Sara (Debt Camel) says
Well good luck with the claim, I have no idea what the Ombudsman will decide.
But I suggest you should immediately do the maths on how to get rid of the car now – sell to settle the finance, hand back or voluntarily terminate. I very much doubt the lender will uphold this, so you are looking at 5-12 months at the Ombudsman. Which you can’t possibly afford. Your affordability claim continues in any situation.
Oliver says
As its PCP finance settlement figure is about £6000 more of what I could hope to get privately.
If I voluntarily terminate would that leave me in same position?
If the car was repossessed clearly the car company will seek to claim their losses, however would I still be able to undertake affordability claim and if successful this would potentially be cancelled. Over the stresses of this I have also sought Mental health support and been prescribed medication, would I be able to mention this if heavy handed tactics for debt collection started?
I appreciate you can’t give yes or no answer for any ombudsman but surely when I was not earning a wage and Alphera had full access to my accounts to see this that they clearly did not do clear affordability checks.
Sara (Debt Camel) says
The relevant figure to VT the car will show in your paperwork (“your right to terminate”).
i suggest you talk to National Debtline on 0808 808 4000 – they can talk you through comparing the 3 options.
Your affordability complaint can carry on under any of them. See https://debtcamel.co.uk/car-finance-win-affordability-complaint/ where you would be moving from case D (still have the car) to case B (car handed back).
Oliver says
Hi
So I have spoken with National Debt line they went through a lot.
I do have one final question. I applied through CarFinance247 who did open banking request three times (would my bank have information about who it was shared with?) I also looked at my credit file there were no Hard Searches just one Soft Search for identification check by 247.
I have complained to Alphera finance but should I also /instead complain to CarFinance 247 as the broker? With any complaint to the ombudsman would this be against 247 or Alphera?
Thanks
Sara (Debt Camel) says
“I applied through CarFinance247 who did open banking request three times (would my bank have information about who it was shared with?) I also looked at my credit file there were no Hard Searches just one Soft Search for identification check by 247.”
I don’t know why you think this information will be useful to an affordability complaint.
“I have complained to Alphera finance but should I also /instead complain to CarFinance 247 as the broker? With any complaint to the ombudsman would this be against 247 or Alphera?”
Your complaint is against Alphera who made the poor lending decision. Not the broker.
I didn’t clearly answer this question before:
“Now this has been raised would I be able to request a pause of payments as the next payment will be due at the start of January.”
No. Well you can ask but Alphera are very very very unlikely to agree. A car is a depreciating asset and this one is expensive – if you stop paying they are likely to repossess, not wait possibly for a year while the complaint goes through.
You have to make the decision now on sale/ handing it back/ voluntary termination. Every month you keep you are (a) unable to afford it and (b) if you win the case you will be charged a fair usage charge in any resolution for a car you do not want and cannot afford.
Oliver says
Thank you
I shall be doing voluntary termination with immediate effect so next payment can be stopped. I also have income/outcome from debtline showing how little disposable income (actually none) I have.
I have been advised by Debtline to share MH assessment with them as well which I will do.
Once I have received response about claim I will likely have to go ombudsman.
Oliver says
So I have done a voluntary termination.
They have advised that I am due to pay the large lump sum, however clearly I am unable to pay this so what do I have to do regarding this?
Sara (Debt Camel) says
Set up a monthly payment for what you can afford and increase it when you get a job
Oliver says
As I am doing unaffordable lending claim if that’s successful will it be likely that this would be cancelled. As clearly if I couldn’t afford the loan then I would not be able to afford this penalty of £26k.
Also as it goes to unsecured loan would house be at risk? I have no other assets or savings all receipts for items of value are in partners name. My partner operates his business from here and as such if it were at risk he would not be able to work.
Sara (Debt Camel) says
yes it is likely.
A lender can go to court for a CCJ, and then get this secured on the house with a charging order. Getting an order For Sale after a charging order is very, very rare.
A lender isn’t likely to go to court while you have a live complaint with them or at the Ombudsman. And probably won’t bother anyway if you are making significant monthly payments – when are you expecting to get a job?
Oliver says
Thanks Sara.
I have been unemployed since March 2024 applied for many jobs had three offers all were withdrawn for various reasons – change of business, internal candidate and no reason – so in terms of when I shall get a job not too sure. I have a PT job for a few hours atm.
I would be limited by what I can offer after doing income/expenditure with national debt line it’s limited to a few 10s £.
I am also seeing MH support and take medication as a result of this so hopefully any action will be light touch at present
Oliver says
Hi Sara
So after initially doing unaffordability complaint against Alphera and chasing this up I am coming up to 8 weeks (In two days) so will complain to the ombudsman.
Alphera have added £73000 to my credit file for initial finance and voluntary termination charge (not paid anything) and atm they have not added any defaults to account. They were sending letters daily but I have sent them cease and desist until at least they decide on unaffordable lending or Ombudsman have.
Is there anything else I can do? Also as they have not bothered responding in 8 weeks is it likely ombudsman will find in favour?
Sara (Debt Camel) says
The Ombudsman will look at your case. the fact that Alphera didn’t reply in 8 weeks doesn’t make it more or less likely that you will this.
Oliver says
Sara thanks for your advice.
Have heard back from the Investigator at FoS who upheld my complaint.
They stated the deposit, and about 50% of monthly payments be returned (plus 8%) and cancelling of agreement and removal of credit marks.
The report was very detailed. Alphera accepted they did not check the agreement and was performed automatically. They also agreed they did not check income and outcome from account and any affordability.
Obviously they can object (or not reply) at which point it will go to the ombudsman, but the report was very detailed I can see the ombudsman agree with the findings.
They did not agree to expenses (service, MOT and spraying of bumper) or any compensation payment. However I think the suggested resolutions are fine.
Thanks again
Ball says
Hi,
I used Flamingo to source me a car and finance.
They told me I had no option to go with Oodle- which I now assume was because I’ve had adverse credit in the past.
Looking into it more recently as I’m trying to get my finances in order, I am paying more in interest than off the loan.
I wrote to oodle who ignored my irresponsible lending claim and replied as though I had made an unaffordable lending claim.
The car is worth less than the balance left to pay on the loan.
I’m looking for some guidance on if and how to make a viable complaint regarding both flamingo and oodle
Sara (Debt Camel) says
“I wrote to oodle who ignored my irresponsible lending claim and replied as though I had made an unaffordable lending claim.”
Almost all irresponsible lending complains are actually affordability complaints.
Are the finance repayments affordable?
Why do you think this is irresponsible lending?
You can also ask Oodle about the commission paid to Flamingo – use MSE’s new tool for this https://www.moneysavingexpert.com/reclaim/mis-sold-car-finance/ (NB this is not the same as a refund of dicretionary commissions, oodle never paid that)
Rosie says
Hi Sara,
Following on from my previous comment I took car finance with close brothers out in 2023. 4 days before I took out the car finance I got a loan of £7000 (not including interest) to pay off some credit cards. The balances of my debt after paying the credit cards and when applied to close brothers for car finance was:
Loan 1 £8000
Loan 2 £7000
Loan 3 £2500
Catalogue 1 £500ish
Catalogue 2 £500ish
I can’t include the interest as it’s been frozen as part of my DMP and I can’t remember the original amount. My monthly debt repayments after paying off the credit cards were:
Loan 1 £169
Loan 2 £200.89
Loan 3 £118
Catalogue 1£50
Catalogue 2 £40
My wages varied but averaged at around £1800. I was privately renting and paying all utilities myself. I ran the credit cards back up within a few months of taking out the car finance and took out a DMP within 6 months but didn’t include the car finance in it so I could keep the car . I’m wondering if you think it’s worth me complaining?
Thanks
Sara (Debt Camel) says
did you have a car before this one?
were the new loan repayments less per month than the cards you cleared?
Rosie says
I didn’t have a car before this one. The car payment is £150pm which would have been around the same as the credit card payments. I’ve just won an overdraft complaint where the ombudsman agrees that Monzo should have seen that I was in financial difficulty from March 2021 due to payday loans and income to debt ratio – whether this is relevant or not I don’t know but I thought I’d mention it.
Sam says
Hi,
I am looking to do an affordability complaint against Advantage car finance. I’m worried that because I did and income and expenditure form the complaint will come to nothing. It showed I could afford the car but I lied about it as I was worried they would take the car away as I’d fallen into default. They never asked for proof of any income and expenditure.Does and income and expenditure form make much difference?
Thanks
Sara (Debt Camel) says
Who was the lender and what was your credit record like when you took the finance out?
Are you in arrears?
Do you have other debts that you are paying?
Sam says
Hi, the finance was with Advantage. Credit was awful when I got the car. Struggled paying it off pretty much from the beginning (Aug 2023) and only just did an Income and Expenditure a few weeks back.
Yes I am in arrears, I thinks it’s about £2500 in arrears!
Yes there are other debs that I am having to pay.
Thanks
Sara (Debt Camel) says
what are these other debts? Can you list the lender and balance?
Sam says
Hi,
Bamboo loans £3200
Oplo £5100
Zopa Credit Card £700
Does doing an income and expenditure form impact the ability to win an affordability case against Advantage?
Thanks
Sam
Sara (Debt Camel) says
Oplo is another car finance?
Is Bamboo a guarantor loan or a normal loan?
Sam says
Bamboo is just a normal loan, did an affordability complaint against them and had the interest wiped off.
Oplo is a loan not car finance.
Thanks
Sara (Debt Camel) says
Affordability complaint against Oplo too I suggest. And probably the Zopa card
I also think you should tell (not ask) all those lender that you can only pay £1 a month
As you have arrears on the car finance that you have to clear. Ask them not to add any interest or charges
Doing an income and expenditure after the car finance started has nothing to do with an affordability complaint. But the problem is you are very early in this contract nd have arrears. If you win an affordability complaint it’s likely you will hve to hand back the car…
If the car is essential, you have to clear the arrears and keep up with the payments even if this means paying nothing to your other debts.
When you have no arrears AND you have paid in total to the finance lender at least the mount you borrowed, you can complain nd if you win will be able to keep the car.
Sam says
Thanks Sara,
I’m happy to hand the car back as it is currently in the garage needing £1600 worth of repairs which I can not afford to pay. Had nothing but issues with the car since I got it.
Sam says
Hi Sara,
I was about to start the voluntary termination procedure but wondered am I better off leaving that and starting the complaint against them?
Thanks
Sara (Debt Camel) says
I think you should talk to National Debtine about your options. You have large arrears – you need advice on whether it is possible to VT and what other options you have.
Alan Alfy says
Hi Sarah,
I had a car finance back in June 2012. This was arranged via carloan4u.co.uk and the signed agreement was with Billing Finance.
This was unaffordable for me at the time, I have a Experian credit file report from 2013 that can back this showing high amount of credit usage and late payments on other accounts and have copy of the original contract with billing finance.
Would I be able to submit for affordability still from 2013? If so would I send to carloans4u or to billing finance
Thanks
Sara (Debt Camel) says
when was the finance settled?
Alan alfy says
It was settled June 2015 and I have the settlement confirmation from Billing Finance for this
Sara (Debt Camel) says
It is extremely unlikely that you will win a complaint for a loan that was settled so long ago.
I suggest you send in a claim for undisclosed commission – these are uncertain and if there is a any refund it’s likely to be in 20206. But this is your best option at the moment
Peter says
I’d like to make a complaint against Startline who issued unaffordable car finance of over £20k without appropriate checks in May 2021.
Who do I raise a complaint with please?
Also, would I qualify to complain about unknown commission? Thanks.
Sara (Debt Camel) says
this finance has finished?
Peter says
Yes it’s completed.
Sara (Debt Camel) says
OK the email to send complaint to is complaintresolution@startlinemotorfinance.com
I would start with this and not bother with the commission claim until the affordability is resolved, at the Ombudsman if necessary. If you win and get all the interest back, there won’t be any commission left to refund
S J says
Hi Sara
I currently have a complaint with the ombudsman, and they’ve asked some additional questions, which I am unsure on how to answer. Any help would be great
When did you become aware that he had suffered a loss in relation to this agreement?
Who did you blame when you realised the loan was unaffordable?
You’ve told me that you became aware that you could complain after the car commission issue came about – can you please explain this in more detail? For example, what did you see and when?
Really unusual questions, given I have had FO contact before with payday loans but the questions were never along these lines
Many thanks
Sara (Debt Camel) says
was the car finance started more than 6 years ago?
S J says
Yes, it was. I explained that I only learned I could claim after the media coverage from the commission claims. But she wants me to expand on that 🤷🏼♀️
And the other 2 questions I’m unsure what she’s asking to be honest
Sara (Debt Camel) says
Last year FOS has been changing the way it handles complaints about events more than 6 years go. These are typical of the questions it now asks.
Here are some common replies, but make sure they are tailored so they are right for you. The first question refers to “he” so I don’t know if you are complaining on behalf of your pattern? Or this was a typo by FOS. I will write We and you need to correct this
“When did you become aware that he had suffered a loss in relation to this agreement?”
I/he/we knew that the payments were difficult throughout the agreement, but at the time we had to make the payments to keep the car, so we were borrowing elsewhere and juggling money. The other borrowing was expensive (Amigo, payday loans) and so I think we thought of that causing us losses rather than the car finance. However with hindsight it is clear that making the car repayments was a major reason why we were so short we borrowed elsewhere.
“Who did you blame when you realised the loan was unaffordable?”
Last year we realised that the car finance had been unaffordable and RCI was to blame RCI so we made a complaint.
“You’ve told me that you became aware that you could complain after the car commission issue came about – can you please explain this in more detail? For example, what did you see and when”
Last January I think I saw a news story about car commission and googling for more about it led me to the Debt Camel page. That explained that these commission complaints were new and they were not the same as affordability complaints and that some people may be able to make an affordability complaint. That was the first time when I realised that many of our financial problems were caused by the car finance payments so I made an affordability complaint.
S j says
Thank you. I will go back with that.
I had a lot of payday loans unaffordability complaints upheld from over that time period. Would that go in my favour with the decisions on this? Or would that not matter?
Sara (Debt Camel) says
I am not sure. Having payday loans should, but FOS may say as you made payday loan complaints you should have complained earlier about this one.
S j says
Hi Sara
Great news, 2 of my complaints were upheld and RCI are having to pay back any redress, the only issue we are having now is they are not responding to any correspondence from FOS since they upheld my complaints, and have missed all the deadline to disagree with them – FOS have given them until the 24th march to respond, and then it goes to Ombudsman, not sure how Ombudsman will make them respond – would it be worth me contacting RCI myself? or leave it in the hands of the FOS
Sara (Debt Camel) says
I would leave this up to the Ombudsman, if RCI do not agree, this will need to go to an Ombudsman for a final decision
Dan says
Hi there. I was wondering if you felt i had a case for unaffordability on a vehicle HP I took out June 2024. I was previously paying approx £202 a month and Part Exd a car for a newer vehicle with new monthly payments of £370. It’s very high interest due to my poor credit status. When I applied I was actually rejected, but the finance company stated if I added my partner I’d be accepted. She is on benefits for illness and hasn’t worked for years. Although the agreement is up to date we are struggling to keep on top of things elsewhere. As I’m early into a 5 Yr agreement I wasn’t sure whether to make an affordability complaint or not? I can continue to keep the account up to date for 6 months or so while a complaint is looked into, as I appreciate it will probably take a long time to be looked at. Im not entirely worried about having to return the car if the case was successful. What do you think please?
Sara (Debt Camel) says
what will you do at the end of 6 months if you don’t win the case? If you don’t need the car and won’t be able to keep up the payments for more than 6 months, it may be better to VT it now and make and affordability complaint.
Dan says
I referenced a period of 6 months merely as that seems to be roughly how long they appear to take. It would be dec 2026 before I’ve paid off 50%. Do you mean to say if I did win a case before the half way mark it wouldn’t matter how much of the term I’d paid off?
I am more aggrieved at the application being accepted once we added on my partner who is only on benefits.
Sara (Debt Camel) says
The “half way mark” is only a relevant point for the Voluntary Termination of an agreement without having to have any more to pay.
But the important stage for affordability complaints isn’t that point, but when you have repaid the amount you borrowed under the agreement, ignoring any interest that has been added. If you win a case before this point, you may have the car repossessed. If you win afterwards then you would be able to keep the car and any remaining liability would be written off. See https://debtcamel.co.uk/car-finance-win-affordability-complaint/ which looks in details at what the decisions are in car finance affordability cases.
If you are just a few months before this point, then you may well be fine. But your agreement hasn’t yet been running for a year.
Whether you have been treated well will come into the assessment of whether the car is affordable or not. It won’t necessarily impact what the decision is if you win your case.
You say you are not that worried about having to return the car if you win the case. Does that mean the car is not essential?
Dan says
I’d love to say it is vital we have a car in the household but I don’t think it is. I just like having one for trips etc. But if I didnt have this car on this high cost loan I’d probably still get a cheap runaround instead. So I think I’m swaying to making the complaint now.
Leanne says
I made a complaint recently on a hire ourchase for a cehicle and had it declined by the car finance company. But their final response doesn’t have the “you can now refer this to the Ombudsman” section. Can I still refer it to the FOS please?
Sara (Debt Camel) says
This is for the recent HP started in June 24?
Delennyk says
Hello,
I got a car finance loan back in 2015 which I struggled to pay for just over a year. The following summer in 2016 I just couldn’t keep doing it and my parents paid the remaining 25k off for me. I was so gutted and angry at the time but wasn’t aware that I could actually complain and have the lender take responsibility for irresponsible lending. I only realised I could complain at the end of last year when I saw one of Martin Lewis’ programmes – so I started the process. I have finally heard back from them and they are asking:
“When did you realise that the business may have been responsible for the difficulties you were facing? (Please provide a date in DD/MM/YY format and an explanation as to how you realised that the business could be at fault)
When you were having to ask your parents to pay off the loan – when did this happen?
Who did you blame for this happening?
Were there any exceptional circumstances that prevented you from raising your complaint in time?”
My mind is a bit boggled and I don’t know what to reply – or don’t want to write the wrong thing so that they disregard my complaint.
Will my complaint be disregarded just because I didn’t know that I could complain?
Any advice would be gratefully received. Thank you
Sara (Debt Camel) says
This may sound irrelevant, but do you have your bank statements from 3 months before this loan in 2015?
And who was the lender?
Len says
Hello Sara, Yes I have all my bank statements – and sent them 4 months before the loan and a few months during the loan. The lender was black horse. My bank statements clearly showed I couldn’t afford the loan.
Sara (Debt Camel) says
OK with that evidence, this is worth pursing. The problem is that as the finance finished more than 6 years ago the Ombudsman may decide this is “too old”.
“When did you realise that the business may have been responsible for the difficulties you were facing? (Please provide a date in DD/MM/YY format and an explanation as to how you realised that the business could be at fault)”
I saw an episode of The Martin Lewis Money Show on ITV in early December 2024 when he talked about car finance commissions. I then googled about car finance complaints and found out that it was also possible to make an affordability complaint if the lender hadn’t made adequate affordability checks. That was the first time I realised that Black Horse can’t have checked my finance properly so I them made a complaint.
“When you were having to ask your parents to pay off the loan – when did this happen?”
In summer 2016 when I couldnt manage the payments
“Who did you blame for this happening?”
At the time I thought it was may fault for choosing too expensive a car.
“Were there any exceptional circumstances that prevented you from raising your complaint in time?”
The fact that my parents were able to help me meant I didn’t have to take debt advice about my other options, I don’t know if I had whether I would have been told about affordability complaints.
Len says
Thank you so much Sara, I immensely appreciate your help!
I did miss one question out that they asked:
“When did you realise that the credit provided by the business was unaffordable? (Please provide a date in DD/MM/YY format and an explanation as to how you realised the credit was unaffordable)”
Im assuming saying that, “as I struggled for months to make the payments prior to my parents paying off the loan”, is sufficient?
Thank you again
Sara (Debt Camel) says
“When did you realise that the credit provided by the business was unaffordable? (Please provide a date in DD/MM/YY format and an explanation as to how you realised the credit was unaffordable)”
I struggled for months in 2015 and 2016 to make the payments which is why I asked my parents for help. As this was car finance and I needed the car, not paying wasn’t an option for me. But at this point I was unfamiliar with the term “unaffordable”, I just knew that I needed help to keep the car., and I didn’t blam Blaock Horse, just myself.
Sam says
Hi,
Is there a template to use to put in a complaint about car finance?
Thanks
Sara (Debt Camel) says
Yes, see the “How to make a car finance affordability complaint” section in the article above these comments
Sam says
Hi Sara
I took out finance on a van for work in 2022 whilst working for a 3rd party company under Amazon – I was classed as self employed however this was regular work – however I wasn’t entitled to the same rights as employed drivers were i.e. Holidays, Sick Pay etc. I basically had the same rights as agency work. I was denied finance by everyone else accept Oodle – via Car Finance 247, I was accepted for finance on a van for £11,500- total finance was £16,372.03 inc interest over a 5 years. My income wasn’t guaranteed nor was it the same each time. For 18 months I paid this without missing any, even if I didnt get work I somehow managed, then I started to struggle, I made some late payments over a 6 month period, then around 2 year mark, I lost my work and during this period I could not make any payments, I contacted them and they put the account on hold however could only do this once and I had to agree to a date to make the next payment. I missed that next payment. Within a month I had secured new work using the van, I contacted Oodle to make a payment, however was told I had broken the agreement and it had been terminated and passed onto collection agency. I asked to continue with the agreement. It was escalated to management, was denied. They asked me to sign over the vehicle voluntarily. I refused due to work needs
Would you class it as irresponsible lending/unaffordable lending in the first place?
What do you recommend?
Sara (Debt Camel) says
I think you should talk to Business Debtline https://www.businessdebtline.org/ about your options at this point.
J says
HP taken with Oodle via Flamingo.
Bad advice from Flamingo.
Monthly repayments were £503 came to sell car worth less than half of finance left to pay.
Made irresponsible lending complaint to Oodle which was disregarded despite me being in debt anyway
Claim with FO and Oodle have instructed bailiffs. What do I do?
Sara (Debt Camel) says
Talk to National Debtline asap about bailiffs and your options.
Have you told FOS about the bailiffs? They may give your case priority.
Your case continues even if your car has been repossessed, so you may still get some cash back, but that may not be your priority at the moment.
zain says
Hi, in September 2024 I took out a lease agreement with Tesla £461 a month, my salary is only 25k but on the application I did put quite a higher amount of 50k a year, is there anything I could do?
Sara (Debt Camel) says
The affordabilty complaints that are being discussed here are for Hire Purchase agreements, not lease agreements. I am sorry I can’t help you about a lease contract.
Molly says
After using Sara’s template I recently submitted a car finance affordability complaint to my finance company and they have accepted that is was a mistake on their part to lend and have agreed to collect my car, cancel the further payments and refund my deposit. This means I’m not having to pay anything more (a saving of around £20,000 for the rest of the agreement). Thank you Sara! It did take about a year of back and forth with the lender but was definitely worth it and I only wish I had found out about this sooner.
Sam says
Hi,
I submitted a complaint to SMF who rejected my complaint. I then sent the complaint to the FOS. I didnt add any bank statements to my initial complaint as I thought these would be requested down the line. Anyway after no communication from the investigator I’ve today received a response from the FOS not upholding the complaint. Is there anything further I can do here? I can provide bank statements showing their estimations are incorrect. My credit commitments were a lot more. Below is some of their response:
Sam says
Specialist Motor Finance gathered information about Mr’s income and expenses. It also completed a credit check. Mr provided an income of £1,444. Using data from the Office for National Statistics and the credit referencing agencies Specialist Motor Finance calculated that Mr monthly expenditure. This showed credit commitments of £178.45, housing costs of around £300, and other living costs of around £280. This would’ve left him around £650 to cover his monthly repayments of £165.25 and any unexpected costs.
Mr has said that he was paying £500 a month for rent and £600-700 on other credit commitments. This is quite different from the figures gathered by Specialist Motor Finance of around £300 and £178.45 respectively. Businesses will often use data from the Office for National Statistics and the credit referencing agencies to get an idea of a potential customer’s expenses. Should this leave a situation where the income and expenditure shows a small surplus, or that it might have been difficult for the customer to make their repayments, we’d expect the business to verify these costs. But where there is a sizeable buffer in the income and expenditure, as in this case, we don’t think it’s unreasonable for a business to use this data.
Considering the positive income and expenditure checks I’m persuaded Specialist Motor Finance completed proportionate checks before providing the loan.
Sara (Debt Camel) says
what rate of interest was this loan?
was it your first car?
were you asked to give information about your expenses when you applied for it?
Sam says
Hi Sara,
– interest was 19.7%
– not my first car, but first car I’ve had on finance
– I wasn’t asked for any expenditure details at all
I have bank statements showing their estimations are incorrect but it sounds like the investigator is satisfied with their ONS estimations.
I also had a default 8 months prior to the application which was mentioned in the FOS response:
‘The credit check showed a previous default around eight months before the application and a number of payday loans which were closed in 2017. At the time of the application the accounts don’t appear to be managed badly and Mr Saint didn’t have a high amount of credit commitments.’
I had multiple payday loans prior to and during the application so I’m not sure why they’re saying my last payday loan was 2017. My credit commitments were higher than their estimations along with my rent.
Just wondering if it is worth pursuing this further, or would FOS always be satisfied with their estimation checks?
Samuel says
I have bank statements showing I was stuck in my overdraft each month, paying over £600 per month in loans and they also show my rent payments of £500 monthly plus lots of gambling. Is it worth sending these over or would they still be satisfied that SMF’s checks were sufficient? I’m really not sure how they calculated my expense estimations as they’re way off.
I wasn’t asked for any expense details.
Interest was 19.7%.
Sara (Debt Camel) says
supply the bank statements and ask the investigator to reconsider, pointing out that ONS averages are unlikely to be appropriate for a bad credit loan and SMF should have tried to verify the expenses more closely
Sam says
I have done this, thank you. Will await their response.
Do you have any idea if the investigator will take the statement into account or would it now be referred to an ombudsman for a final decision?
Sara (Debt Camel) says
investigators will sometimes change their mind
Melissa says
Hi can I have some advice please as I have a historic car finance with moneybarn and followed the guide to raise the complaint and have received a response to which I’m not satisfied so will raise with FOS. Loan is from 2014 so cannot access bank statements from this time however I do have the payslips and original agreement as I was 22 working part time. Would that be enough? As I’m really finding it difficult to obtain bank statements for that time
Sara (Debt Camel) says
It is very difficult to get FIS to look at a loan that was finished more than 6 years ago. And without bank statements it is hard to prove unaffordability
Rachel N says
I took out car finance in the summer of 2006 with a garage (who set me up with a finance provider)
I can’t remember the finance company or agreement number. I contacted the garage but because it was so long ago they don’t have any details. I tried to looking for bank statements and contacted my previous bank they said because it was so long ago no record.
Does anyone have any more suggestions or should I give up?
Sam Saint says
They’ve come back quite quickly but still disagreed. Below is their response. I supplied a bank statement showing I was constantly in overdraft, had 10+ payday loans at the time of the application, 4 credit cards, and rent payments higher than their estimations etc. I’ve asked for it to be reviewed by an ombudsman but I’m baffled how after reviewing my bank statement that this hasn’t been upheld. :
“I don’t think it’s unreasonable for businesses to use data from the Office for National Statistics and the credit referencing agencies to get an idea of a potential customer’s expenses. Should this show a small surplus then we’d expect the business to verify the expenses. However, in this case the income and expenditure checks showed a substantial monthly surplus, so I didn’t think it was proportionate to expect Specialist Motor Finance to verify your income and expenditure.
I do agree that the default is a significant concern, and that eight months prior isn’t that long. However as the information from the credit check showed your accounts didn’t appear to be managed badly and you had low credit commitments. I appreciate that you have said this is incorrect, and that you had payday loans and substantial credit commitments. I don’t think it was unreasonable for Specialist Motor Finance to rely on the information provided by Experian.”
Sara (Debt Camel) says
What was the interest rate on this car finance?
Sam says
Sorry, I added this reply to the wrong comment. I am enquiring about SMF. I am the one above. Interest was around 19%. I’m hopeful an ombudsman will review it differently.
Thank you
Sara (Debt Camel) says
I think you should point out that such a high interest rate means SMF knew you had difficulties and they should have tried to verify your expenses. If they had looked at your bank statement the payday loan payments would have been obvious
Jade says
Hi Sara,
Thank you for the wealth of knowledge you provide on this site!
I contacted Motonovo last year and they have confirmed there was a discretionary commission arrangement on my car finance. The deadline keeps getting pushed back but eager to hear the outcome! Can an affordability complaint also be made whilst this complaint is pending?
Sara (Debt Camel) says
yes it can – how long ago did this car finance start? End?
Jade says
The agreement started in July 2018 and ended in August 2023. At the time of purchase, I had 4 pretty much maxed out credit cards and lived consistently in my overdraft – I remember sitting in the dealership cringing, expecting the finance application to be denied.
Sara (Debt Camel) says
Bank statements for the 3 months before July 2018 are the best proof of unaffordability. Attach them to your complaint if you have them
Lisa says
Hello,
I have made a complaint to motonovo finance, they have said they have done all the checks and the car finance was affordable, I have passed my complaint to financial ombudsman, they have upheld my claim but said even tho I have repaid the car in principle in full they are more likely to take the car from me. Is that the case if I have paid the car in principle in full and already paid a lot more than that. Hope to hear back from you soon.
Thank you
Sara (Debt Camel) says
That doesn’t sound right. Can you paste in the decision here?
Lisa says
He hasn’t sent me the letter yet, he just called me to notify today (the ombudsman) that he is upholding my complaint and they are giving motonovo 2 weeks to reply. Can you please advise me what I should be expecting from this complaint so I am a bit more prepared when they send me the outcome please
Sara (Debt Camel) says
How much did you borrow (ignoring interest) and how much have you paid Motonovo so far in total?
Lisa says
We have borrowed 12,700k repaid 14,200
Sara (Debt Camel) says
Assuming you aren’t in arrears on the finance, I would expect the remaining balance to be cleared, possession of the car to be transferred to you and a refund of the interest you have paid, of £1500.
Lisa says
Hi, that’s what I have received today.
To settle Mrs Dubrovska’s complaint MotoNovo should do the following:
• End the agreement with nothing further to pay.
• Refund the deposit, adding 8% simple interest per year* from the date of payment to
the date of settlement.
• MotoNovo to calculate how much Mrs Dubrovska has paid in total and deduct
£11,475.00 for fair usage. If Mrs Dubrovska has paid more than the fair usage figure,
MotoNovo should refund any overpayments, adding 8% simple interest per year*
from the date of payment to the date of settlement.
• Remove any adverse information recorded on Mrs Dubrovska’s credit file regarding
the agreement.
• If there any arrears after the settlement has been calculated, MotoNovo should
arrange an affordable repayment plan. And treat Mrs Dubrovska with forbearance
and due consideration.
*HM Revenue & Customs requires MotoNovo to take off tax from this interest. MotoNovo
must give Mrs Dubrovska a certificate showing how much tax it’s taken off if Mrs Dubrovska
Sara (Debt Camel) says
Are there any arrears on this?