Car finance misold

DdraigCoch

Hi everyone,

I'm hoping to get some advice on a really frustrating car finance situation. I feel like I've been completely wronged by a dealership and I'm trying to understand where I stand.

Here's a summary of what happened:

October 2019: I took out a car finance deal for a vehicle from a dealership representing a major car brand. The car was for my personal use and was registered in my name.

The Problematic Setup: Despite the car being for me, the dealership told me they "had to" take the finance agreement out in my father's name. I have an email from their representative explicitly stating, "Its been accepted, just waiting for the paperwork, I Will contact you when sorted, had to do it in your dads name, speak later." This decision was made without my explicit, informed consent for the primary finance being solely in his name, especially as discussions were around me needing a guarantor for my finance.

The Repossession Threat: In 2021, I received a terrifying letter stating my car could be repossessed by the finance company because the agreement was under my father's name, not mine!

Forced New Agreement: We immediately contacted the brand's customer service, and they insisted we had to take out a new finance agreement directly in my name to resolve the issue and prevent repossession.

Dealership Accepted Liability (Implied): Crucially, the original dealership actually paid off the first finance agreement (the one in my father's name). To me, this heavily implies they knew they had made a significant error.

Financial Impact: I've calculated that due to having to take out this second agreement, I've likely overpaid by approximately £3,088.86 compared to what I would have paid if the finance was set up correctly for me from the start. This doesn't even include the immense stress and inconvenience caused by the repossession threat and having to sort out a whole new finance deal.

I'm now looking to complain formally to the finance provider and potentially the Financial Ombudsman Service.

My questions for the forum are:

Do I have a strong case here, especially with the email evidence and the dealership paying off the first agreement?

What kind of compensation could I realistically expect, beyond the direct financial overpayment?

Any general advice on navigating this complaint process?

Any thoughts or similar experiences would be hugely appreciated! I'm trying to do this myself without a lawyer if possible.

Thanks in advance for your help!

elsien

Did your father not have to agree to the finance being set up in his name? Surely they couldn’t have done it without his signature? 

On what basis have you worked out that has cost you more? Does the new finance agreement have higher interest rates for example?

MyRealNameToo

DdraigCoch said:

Hi everyone,

I'm hoping to get some advice on a really frustrating car finance situation. I feel like I've been completely wronged by a dealership and I'm trying to understand where I stand.

Here's a summary of what happened:

October 2019: I took out a car finance deal for a vehicle from a dealership representing a major car brand. The car was for my personal use and was registered in my name.

The Problematic Setup: Despite the car being for me, the dealership told me they "had to" take the finance agreement out in my father's name. I have an email from their representative explicitly stating, "Its been accepted, just waiting for the paperwork, I Will contact you when sorted, had to do it in your dads name, speak later." This decision was made without my explicit, informed consent for the primary finance being solely in his name, especially as discussions were around me needing a guarantor for my finance.

The Repossession Threat: In 2021, I received a terrifying letter stating my car could be repossessed by the finance company because the agreement was under my father's name, not mine!

Forced New Agreement: We immediately contacted the brand's customer service, and they insisted we had to take out a new finance agreement directly in my name to resolve the issue and prevent repossession.

Dealership Accepted Liability (Implied): Crucially, the original dealership actually paid off the first finance agreement (the one in my father's name). To me, this heavily implies they knew they had made a significant error.

Financial Impact: I've calculated that due to having to take out this second agreement, I've likely overpaid by approximately £3,088.86 compared to what I would have paid if the finance was set up correctly for me from the start. This doesn't even include the immense stress and inconvenience caused by the repossession threat and having to sort out a whole new finance deal.

I'm now looking to complain formally to the finance provider and potentially the Financial Ombudsman Service.

My questions for the forum are:

Do I have a strong case here, especially with the email evidence and the dealership paying off the first agreement?

What kind of compensation could I realistically expect, beyond the direct financial overpayment?

Any general advice on navigating this complaint process?

Any thoughts or similar experiences would be hugely appreciated! I'm trying to do this myself without a lawyer if possible.

Thanks in advance for your help!

Dont follow, to be honest.

You state its implied that the dealership accepted responsibility because they paid off the original finance agreement. If they paid it off why did you need a new finance agreement? Sounds like you took out new finance and that finance paid off the original finance not the dealer. 

What are you basing your calculation of over payment on? What interest are you assuming you'd have gotten had the finance not been in your father's name? Sounds more likely that you would have had to get subprime lending and so whilst the messing about in 2021 was a pain its saved you money overall. 

Secondly, why have you waited 4 years from when it being a problem was identified? The time limit for the ombudsman is 3 years from when you became aware of there being a problem so you are most likely too late. 

DdraigCoch

elsien said:

Did your father not have to agree to the finance being set up in his name? Surely they couldn’t have done it without his signature? 

On what basis have you worked out that has cost you more? Does the new finance agreement have higher interest rates for example?

Good question! It's not actually due to higher interest rates – both agreements had the same 3.51% APR. The overpayment comes from the fact that:

• The original loan amount was £12,500.

• After about 19 months of payments on that original loan (totaling £3,420), it was paid off by the dealership.

• Then, a new loan of £11,495 had to be taken out in my name.

If the original finance had been set up correctly for me from the start and simply continued, the total cost would have been the original £13,473.28. However, because we had to pay down part of the first loan, and then take out a new loan for a significant amount (even if slightly less than the original principal), the combined total of what was paid on the first agreement plus the full cost of the second agreement (£3,420 + £13,142.14 = £16,562.14) is significantly higher than the original total cost.

So, the overpayment of approximately £3,088.86 is the difference between the actual total cost incurred across both agreements and what the total cost would have been if the single, original agreement had run its course as intended.

Exodi

If I'm interpreting this correctly, you may not have been able to originally take out the finance in your own name - as you mention there were discussions around needing a guarantor?

Typically a guarantor agreement is a facade, and in reality it's just an agreement set up between the creditor and the guarantor. In your case it seems they didn't even bother with the facade and just signed the finance agreement directly.

Could you also clarify the situation in 2021. Are you suggesting that out of the blue they told you they would repossess the car as the finance agreement was in your dads name? Were you (both) current on payments? How would they even know who was the main driver of the vehicle? 

In any case, I'm surprised they were seemingly complicit in this arrangement one day and challenging it the next.

DdraigCoch

MyRealNameToo said:

DdraigCoch said:

Hi everyone,

I'm hoping to get some advice on a really frustrating car finance situation. I feel like I've been completely wronged by a dealership and I'm trying to understand where I stand.

Here's a summary of what happened:

October 2019: I took out a car finance deal for a vehicle from a dealership representing a major car brand. The car was for my personal use and was registered in my name.

The Problematic Setup: Despite the car being for me, the dealership told me they "had to" take the finance agreement out in my father's name. I have an email from their representative explicitly stating, "Its been accepted, just waiting for the paperwork, I Will contact you when sorted, had to do it in your dads name, speak later." This decision was made without my explicit, informed consent for the primary finance being solely in his name, especially as discussions were around me needing a guarantor for my finance.

The Repossession Threat: In 2021, I received a terrifying letter stating my car could be repossessed by the finance company because the agreement was under my father's name, not mine!

Forced New Agreement: We immediately contacted the brand's customer service, and they insisted we had to take out a new finance agreement directly in my name to resolve the issue and prevent repossession.

Dealership Accepted Liability (Implied): Crucially, the original dealership actually paid off the first finance agreement (the one in my father's name). To me, this heavily implies they knew they had made a significant error.

Financial Impact: I've calculated that due to having to take out this second agreement, I've likely overpaid by approximately £3,088.86 compared to what I would have paid if the finance was set up correctly for me from the start. This doesn't even include the immense stress and inconvenience caused by the repossession threat and having to sort out a whole new finance deal.

I'm now looking to complain formally to the finance provider and potentially the Financial Ombudsman Service.

My questions for the forum are:

Do I have a strong case here, especially with the email evidence and the dealership paying off the first agreement?

What kind of compensation could I realistically expect, beyond the direct financial overpayment?

Any general advice on navigating this complaint process?

Any thoughts or similar experiences would be hugely appreciated! I'm trying to do this myself without a lawyer if possible.

Thanks in advance for your help!

Dont follow, to be honest.

You state its implied that the dealership accepted responsibility because they paid off the original finance agreement. If they paid it off why did you need a new finance agreement? Sounds like you took out new finance and that finance paid off the original finance not the dealer. 

What are you basing your calculation of over payment on? What interest are you assuming you'd have gotten had the finance not been in your father's name? Sounds more likely that you would have had to get subprime lending and so whilst the messing about in 2021 was a pain its saved you money overall. 

Secondly, why have you waited 4 years from when it being a problem was identified? The time limit for the ombudsman is 3 years from when you became aware of there being a problem so you are most likely too late. 

Thanks for your excellent questions, they're really helpful for clarifying things!

Regarding my father's agreement/signature: You're absolutely right that my father would have had to sign the finance agreement. The core of my complaint isn't that his signature was forged or missing. Instead, it's about the misrepresentation of the finance structure. Our initial discussions with the dealership revolved around me needing a guarantor for my finance. However, they then unilaterally decided to put the finance solely in his name as the primary borrower, stating they "had to do it in his name." We believe this was presented in a misleading way, without fully explaining the implications of him being the sole primary borrower for a car registered to me, which ultimately led to the repossession threat. He signed, but under what we now understand was a flawed and misrepresented understanding of the arrangement.

Regarding the overpayment calculation and interest rates: Another great point! You're correct that both the original and the new finance agreements actually had the same APR of 3.51%. So, the overpayment isn't because I ended up with a higher interest rate.

The overpayment of approximately £3,088.86 comes from the fact that:

• I paid £3,420 on the first agreement (from Oct 2019 to May 2021).

• Then, a new finance agreement had to be taken out in my name for £11,495, with a total repayable of £13,142.14.

• My total actual outlay across both agreements is £3,420 (old) + £13,142.14 (new) = £16,562.14.

• If the original finance had been set up correctly for me and simply continued, the total cost would have been £13,473.28.

The difference (£16,562.14 - £13,473.28 = £3,088.86) is the additional cost incurred because the initial finance was structured incorrectly, forcing me to effectively pay down part of one loan and then take out a new, substantial loan.

Regarding the time limit for the Ombudsman and the delay: You've hit on a very important point regarding time limits. The Financial Ombudsman Service (FOS) generally has a 3-year "awareness" rule and a 6-year "event" rule. While I became aware of the problem in 2021 (meaning I'm likely past the 3-year awareness rule), the original finance agreement was taken out in October 2019, so I'm still within the 6-year long-stop date (October 2025).

Crucially, the FCA has also put a temporary pause on firms having to respond to car finance complaints while they conduct a wider investigation. This means firms don't have to provide final responses until after December 4, 2025, and consumers generally have 15 months from that final response to go to the FOS. This pause effectively extends the time I have to refer a complaint to the FOS.

One final, crucial clarification: You asked: "If they paid it off why did you need a new finance agreement? Sounds like you took out new finance and that finance paid off the original finance not the dealer."

This is a really important distinction that I need to clarify for my case. Could you please confirm whether the dealership directly paid off the first finance agreement, or if the new finance agreement you took out was used to settle the old one? This detail significantly impacts the "dealership accepted liability" argument.

Thanks again for helping me think through these points!

DdraigCoch

Exodi said:

If I'm interpreting this correctly, you may not have been able to originally take out the finance in your own name - as you mention there were discussions around needing a guarantor?

Typically a guarantor agreement is a facade, and in reality it's just an agreement set up between the creditor and the guarantor. In your case it seems they didn't even bother with the facade and just signed the finance agreement directly.

Could you also clarify the situation in 2021. Are you suggesting that out of the blue they told you they would repossess the car as the finance agreement was in your dads name? Were you (both) current on payments? How would they even know who was the main driver of the vehicle? 

In any case, I'm surprised they were seemingly complicit in this arrangement one day and challenging it the next.

Thanks for those insightful questions! Here's a summary of my thoughts on them:

• My father's agreement/signature: My father did sign the agreement. The issue isn't that his signature was missing, but that the dealership, after discussions about him being a guarantor for my finance, appears to have unilaterally made him the sole primary borrower. We believe this was a misleading setup, especially as the car was for my use and registered to me.

• 2021 Repossession Threat: Yes, the repossession threat felt sudden and was specifically due to the finance company noting the discrepancy between the finance agreement holder (my father) and the registered keeper of the vehicle (me). Payments on the original agreement were current at the time; the issue was purely about the names not matching their records for the primary finance.

• Dealership's Complicity: I agree it seems contradictory. My view is that the dealership made an initial error in setting up the finance. When that error led to the serious repossession threat, they then acted to rectify their mistake by pushing for a new agreement and, as I recall, paying off the first one. This shift highlights their responsibility for the initial flawed arrangement.

DdraigCoch

DdraigCoch said:

MyRealNameToo said:

DdraigCoch said:

Hi everyone,

I'm hoping to get some advice on a really frustrating car finance situation. I feel like I've been completely wronged by a dealership and I'm trying to understand where I stand.

Here's a summary of what happened:

October 2019: I took out a car finance deal for a vehicle from a dealership representing a major car brand. The car was for my personal use and was registered in my name.

The Problematic Setup: Despite the car being for me, the dealership told me they "had to" take the finance agreement out in my father's name. I have an email from their representative explicitly stating, "Its been accepted, just waiting for the paperwork, I Will contact you when sorted, had to do it in your dads name, speak later." This decision was made without my explicit, informed consent for the primary finance being solely in his name, especially as discussions were around me needing a guarantor for my finance.

The Repossession Threat: In 2021, I received a terrifying letter stating my car could be repossessed by the finance company because the agreement was under my father's name, not mine!

Forced New Agreement: We immediately contacted the brand's customer service, and they insisted we had to take out a new finance agreement directly in my name to resolve the issue and prevent repossession.

Dealership Accepted Liability (Implied): Crucially, the original dealership actually paid off the first finance agreement (the one in my father's name). To me, this heavily implies they knew they had made a significant error.

Financial Impact: I've calculated that due to having to take out this second agreement, I've likely overpaid by approximately £3,088.86 compared to what I would have paid if the finance was set up correctly for me from the start. This doesn't even include the immense stress and inconvenience caused by the repossession threat and having to sort out a whole new finance deal.

I'm now looking to complain formally to the finance provider and potentially the Financial Ombudsman Service.

My questions for the forum are:

Do I have a strong case here, especially with the email evidence and the dealership paying off the first agreement?

What kind of compensation could I realistically expect, beyond the direct financial overpayment?

Any general advice on navigating this complaint process?

Any thoughts or similar experiences would be hugely appreciated! I'm trying to do this myself without a lawyer if possible.

Thanks in advance for your help!

Dont follow, to be honest.

You state its implied that the dealership accepted responsibility because they paid off the original finance agreement. If they paid it off why did you need a new finance agreement? Sounds like you took out new finance and that finance paid off the original finance not the dealer. 

What are you basing your calculation of over payment on? What interest are you assuming you'd have gotten had the finance not been in your father's name? Sounds more likely that you would have had to get subprime lending and so whilst the messing about in 2021 was a pain its saved you money overall. 

Secondly, why have you waited 4 years from when it being a problem was identified? The time limit for the ombudsman is 3 years from when you became aware of there being a problem so you are most likely too late. 

Thanks for your excellent questions, they're really helpful for clarifying things!

Regarding my father's agreement/signature: You're absolutely right that my father would have had to sign the finance agreement. The core of my complaint isn't that his signature was forged or missing. Instead, it's about the misrepresentation of the finance structure. Our initial discussions with the dealership revolved around me needing a guarantor for my finance. However, they then unilaterally decided to put the finance solely in his name as the primary borrower, stating they "had to do it in his name." We believe this was presented in a misleading way, without fully explaining the implications of him being the sole primary borrower for a car registered to me, which ultimately led to the repossession threat. He signed, but under what we now understand was a flawed and misrepresented understanding of the arrangement.

Regarding the overpayment calculation and interest rates: Another great point! You're correct that both the original and the new finance agreements actually had the same APR of 3.51%. So, the overpayment isn't because I ended up with a higher interest rate.

The overpayment of approximately £3,088.86 comes from the fact that:

• I paid £3,420 on the first agreement (from Oct 2019 to May 2021).

• Then, a new finance agreement had to be taken out in my name for £11,495, with a total repayable of £13,142.14.

• My total actual outlay across both agreements is £3,420 (old) + £13,142.14 (new) = £16,562.14.

• If the original finance had been set up correctly for me and simply continued, the total cost would have been £13,473.28.

The difference (£16,562.14 - £13,473.28 = £3,088.86) is the additional cost incurred because the initial finance was structured incorrectly, forcing me to effectively pay down part of one loan and then take out a new, substantial loan.

Regarding the time limit for the Ombudsman and the delay: You've hit on a very important point regarding time limits. The Financial Ombudsman Service (FOS) generally has a 3-year "awareness" rule and a 6-year "event" rule. While I became aware of the problem in 2021 (meaning I'm likely past the 3-year awareness rule), the original finance agreement was taken out in October 2019, so I'm still within the 6-year long-stop date (October 2025).

Crucially, the FCA has also put a temporary pause on firms having to respond to car finance complaints while they conduct a wider investigation. This means firms don't have to provide final responses until after December 4, 2025, and consumers generally have 15 months from that final response to go to the FOS. This pause effectively extends the time I have to refer a complaint to the FOS.

One final, crucial clarification: You asked: "If they paid it off why did you need a new finance agreement? Sounds like you took out new finance and that finance paid off the original finance not the dealer."

This is a really important distinction that I need to clarify for my case. Could you please confirm whether the dealership directly paid off the first finance agreement, or if the new finance agreement you took out was used to settle the old one? This detail significantly impacts the "dealership accepted liability" argument.

Thanks again for helping me think through these points!

The dealership paid off the finance agreement and it was then officially their car again to sanction a new deal.

MyRealNameToo

DdraigCoch said:
One final, crucial clarification: You asked: "If they paid it off why did you need a new finance agreement? Sounds like you took out new finance and that finance paid off the original finance not the dealer."

This is a really important distinction that I need to clarify for my case. Could you please confirm whether the dealership directly paid off the first finance agreement, or if the new finance agreement you took out was used to settle the old one? This detail significantly impacts the "dealership accepted liability" argument.

Thanks again for helping me think through these points!

You don't need to ask anyone, if the dealer had paid it off and you took a loan for £11,495 then £11,495 would have gone into your bank. If you weren't paid £11,495 then the new finance paid off the old finance either directly or into and out of the dealership but that just a practical matter not one that changes who paid off the finance.  They or the finance company may have paid/waived the early redemption fee but thats only 28 days interest or circa £30-£35 in your case. 


I'm not following your numbers either... 

You say over 19 months you had paid £3,420 so each repayment was £180. To get that low a repayment on a 3.51% APR loan of £12,500 would mean the loan was for 6 years and 6 months and the total payable of £13,998

You have refinanced the outstanding balance of £11,495 - why was it this much? If you had made all payments on time after 19 months it should have been circa £9,700

How long have you refinanced for? The residual of the original period or another 6.5 years?


The most fundamental flaw in your maths though is that you are assuming the 3.51% is what you would have gotten in 2019 whereas you were declined for that. Really you need to look at what APR you could have gotten elsewhere at that time which is next to impossible to do retrospectively but is likely to have been above the rate offered to your father. 

Altior

What were the monthly repayment amounts and duration of loan 1 and loan 2? 

One would expect loan 2 to be 19 months shorter, but I suspect possibly not. 

born_again

So  how old were you at the time of taking out the finance?