How to Use a Car Finance Claim Calculator for Maximum Refunds

The Financial Conduct Authority has been investigating finance complaints related to discretionary commission arrangements used by car dealerships and brokers from around 2007 until they were banned in 2021. Aside from agreements made in these years, consumers can still complain about the car finance commission beyond 2021 as long as they have grounds for their complaints if they believe they were mis-sold car finance. Consumers must consider factors such as transparency, suitability, and affordability of the car finance agreement they entered into. 

Consumers are encouraged to check their car finance agreements and file a complaint if they believe they are entitled for compensation. They can also use a car finance claim calculator to estimate the possible compensation they would receive. 

What is a Car Finance Calculator?

A car finance claim calculator is a tool that helps consumers estimate how much compensation they might be entitled to if they were mis-sold car finance. These calculators ask for consumers’ information related to their car finance agreement. Depending on the car finance claim calculator, the most common information being asked is:

• The personal information of the consumer

(name, phone number, email, address, birthdate)

• The total amount borrowed  
• The length of the agreement  
• The interest rate you paid  
• The type of agreement (e.g., PCP, HP)

The calculator will utilise this information to estimate the amount of commission hidden from them and their interest rate. If it is determined that there is a hidden commission, this will be used as a basis for the consumer’s mis-selling claim.  

While these car finance claims calculators are deemed helpful, consumers are advised to consider the following - 

• Car finance calculators only provide an estimate of potential compensation. The amount a consumer can potentially receive may be higher or lower, depending on the circumstances of their case.
• Not all car finance claim calculators generate similar results. Consumers should use a calculator from a reputable source or other law firms specialising in mis-sold car finance claims.
• Using a car finance calculator does not guarantee that the consumer’s claims will be successful. It only gives them an idea of whether their claims are valid and the potential compensation they would receive from them.

Consumers are highly encouraged to check their car finance agreement and contact their car finance providers. If they do not hear from their car finance providers, they could escalate their complaints to the Financial Ombudsman Service to seek professional and legal advice.

Why Using a Car Finance Claim Calculator is Important

Using a car finance claim calculator is a smart move for consumers if they believe they were mis-sold car finance because they - 

• provide easy and quick estimation. Consumers can get an idea of the potential compensation they could receive from their claim. They just have to input basic information about their finance agreement, and the calculator will do the work for them. This can help them decide whether a formal claim process is worth exploring.
• add awareness to consumers who believe they were mis-sold car finance. They might not even realise they were mis-sold car finance. By checking it through the calculators, they might find potential issues like hidden commissions or inflated interest rates, empowering them to take legal action.
• help consumers make informed decisions. Through the calculators, they can see the potential value of their claim. This can help them make informed decisions as they weigh the potential benefits over the time and effort involved in the process.
• build the confidence of the consumers. A potential compensation amount can boost the consumers' confidence and encourage them to take the next steps. It reassures them that their concerns are valid and that pursuing a claim might be worthwhile.
• provide an early indication of the whether consumers' claims are valid. While the calculator data is not definitive proof, it can offer an early indication of whether their claims are valid or not. It suggests significant potential compensation and a sign that further investigation is warranted.

Essentially, a car finance claim calculator is an accessible and informative tool that empowers consumers to understand their rights and explore potential avenues for redress.

Essential Data Needed for Accurate Calculations

Consumers need accurate and reliable data on hand to ensure reliable calculations when using car finance claim calculators. Here is the key information that car finance claims calculators usually ask consumers.

1. Finance Agreement Details:

• Type of Agreement: Specify whether it was a Personal Contract Purchase (PCP), Hire Purchase (HP), or another type of car finance agreement.
• Start Date: The date the finance agreement commenced.
• End Date or Term: The date the agreement ended or the total duration of the agreement.
• Total Amount Borrowed: The initial loan amount is taken to finance the vehicle.
• Vehicle Purchase Price: The total cost of the vehicle, including any deposit made.
• Interest Rate (APR): The Annual Percentage Rate (APR) charged on the finance agreement.
• Monthly Payments: The amount paid each month towards the finance.
• Final Payment (if applicable): Any balloon payment or optional final payment due at the end of a PCP agreement.

2. Commission-Related Information (if applicable):

• Commission Amount: This figure can be helpful if you know any commission paid to the dealer for arranging the finance.
• Commission Structure: Details about how the commission was calculated (e.g., percentage of the loan amount, flat fee).

3. Additional Relevant Information:

• Early Settlement Information: If the agreement was settled early, details about the settlement date and any associated fees.
• Complaints History: Any previous complaints made to the lender or dealer regarding the finance agreement.

This readily available information will enable the calculator to perform more accurate calculations and provide a more reliable estimate of potential compensation. To ensure accuracy, it's important to gather all relevant documents related to the finance agreement before using the calculator.

How to Use a Car Finance Claim Calculator

Using a car finance claim calculator is generally straightforward. Here's a step-by-step guide to help consumers navigate these tools effectively.

1. Find a Reputable Calculator

Consumers can look for calculators from trusted sources, such as claims management companies, law firms specialising in car finance claims, or consumer advice websites.

2. Gather necessary information

Before starting, consumers need to gather all relevant information about their car finance agreement. This information could be the following:

• Type of agreement (PCP, HP)
• Start date of the agreement
• Total amount borrowed
• Vehicle purchase price
• Interest rate (APR)
• Monthly payment amount
• Length of the agreement

3. Input the data in the car finance claim calculator

Consumers should carefully input the data into the car finance claim calculator. They have to double-check for accuracy to ensure more reliable results of the estimate from the calculators.

4. Review the results from the calculator

The calculator will process the data once the consumers submit the information and provide an estimated compensation amount. In some instances, the results might offer additional information, such as the potential commission earned by the dealer.

5. Understand the limitations

Consumers must remember that the results given by the calculators are just estimates, not guaranteed payouts. Depending on the circumstances of their case, the actual compensation they could receive from their claims could be higher or lower.

6. Seek professional advice

If the calculator indicates a potential claim, seeking advice from a solicitor or claims specialist is crucial. They can assess consumers’ situations thoroughly and guide them through the claims process.

Additional Suggestions

• Use multiple calculators: Consider using different sources to compare estimates and get a broader perspective.
• Be wary of unrealistic promises: Some calculators might inflate potential compensation figures. Choose calculators from reputable sources that provide realistic estimates.
• Don't delay: If you suspect mis-selling, act promptly. There might be time limits for submitting claims.

Remember, a car finance claim calculator is a helpful starting point, but it's essential to seek expert advice to navigate the complexities of a claim effectively.

If a consumer believes they may have mis-sold car finance, using a car finance claim calculator can be a valuable first step. These tools estimate their potential refund and help them understand the scope of their claim. However, it's crucial to remember that calculators are just one part of the process. Gathering all necessary documentation and seeking professional advice can significantly increase the chances of a successful claim.