Martin Lewis shares next steps after more than 500,000 people file complaint on warning for car buyers before 2021

Martin Lewis has shared the next steps after over 500,000 people filed complaints after his warning for car buyers before 2021.

In January, the Money Saving Expert (MSE) revealed that ‘billions’ could be owed in compensation for motorists who bought their car, van, camper van or motorbike between 2007 and 2021.

Allegations of some dodgy business practices have analysts at Jefferies calculating around a whopping £13 billion might end up needing to be paid out by the industry, according to the Financial Times.

Here’s Lewis’ explanation:

The Financial Conduct Authority (FCA) launched a misconduct investigation amid concerns that those who bought their vehicle on motor finance might have been unfairly charged inflated prices for loans on second-hand and new vehicles.

The MSE team don’t reckon the FCS would be doing this unless there was substantial evidence so its ‘likely’ there’ll be a pay-out when it reports in September.

And Lewis’ view is ‘the sooner you complain, the safer’.

He said in the newsletter: “Last Tuesday, we launched our brand new car finance hidden commission reclaiming guide & tool and... wow!

"In just seven days you've sent over 530,000 complaint emails via it.

It applies to those who purchased on finance before 2021. Credit: Monty Rakusen/Getty Images

“The regulator, the Financial Conduct Authority (FCA), estimates 40% of finance agreements had these dodgy commission arrangements (you won't know if you did as it was hidden) and the average pay-out per arrangement may be £1,100.

"So that potentially equates to up to £234 million coming back to people.”

For those who have complained, the team say it’s ‘uncharted territory’ but shared ‘provisional thoughts so far’ for the next steps.

If you’ve not had a reply yet, the MSE says ‘don’t be too concerned’ as it’s likely the firms are swamped by the unprecedented number of complaints since Lewis announced the tool.

If you’ve been told: “You had a Discretionary Commission Arrangement (DCA) and we've logged your complaint,” then its good news as you’re ‘potentially in line’ for a pay-out.

Unless you’re asked for further information, you’ve just got to wait for the investigation to end in September.

If you’re told: “You didn’t have a DCA,” then it’s more good news as you weren’t overcharged and don’t need to pursue the claim further.

MSE warns if you’re ‘told you had a DCA but… then a fob off’ then it’s a tactic ‘designed to put people off’.

The team’s ‘main thought’ is don’t worry because it’s been confirmed you had one and it’s logged, so really all you need to do is wait. While you can go to the Financial Ombudsman, MSE think ‘it’s safest to hold fire on that until the FCA reports’.

And if you’ve been told 'we can’t find your info' then it’s ‘trickier’.

If it’s been longer than six years since your car finance was active things could be ‘harder’, but your firm should be trying to find it.

“The more details you can provide, the better,” the MSE say.

Lewis’ team are going to keep updating their next steps over the next few weeks, so it’s worth keeping an eye out if you’ve complained.

If you think you may have been missold motor finance, you can use Martin Lewis' complaints tool here.

It's only been a few days since Martin Lewis launched his free tool to help car buyers who got a vehicle between 2007 and 2021 see if they're entitled to some money back - and thousands now look to be in line for compensation.

Last month, the Money Saving Expert revealed that 'billions' could be owed following allegation of some unsavory business practices.

In fact, analysts at Jefferies calculated around £13 billion might have to be paid out by the industry, according to the Financial Times.

Speaking to the BBC, Martin Lewis explained what had happened to potentially leave customers out of pocket: "??What was happening at that point is the lenders who organised the finance were saying to the car dealers 'the commission is discretionary'.

"In other words, if you want more commission on these finance products - which is why they were being more heavily sold - you can simply increase the cost of the finance and you will get more commission.

"Many of them did so and it wasn't declared, so the consumer was not aware quite what enormous sums were being paid in commission to car dealers for this type of finance."

Almost half a million people have used the tool in just three days, maybe you should give it a go. Credit: ITV

So, if you bought your vehicle with a Personal Contract Purchase (PCP) or finance agreement then you could have been charged more than you ought to have been.

The Financial Conduct Authority (FCA) has launched an investigation into claims that car dealers were told by lenders that they could get more commission money by increasing the cost of finance.

If that turns out to have been the case then you might have spent more than you had to on buying a car so the dealer could get more in commission.

Lewis has said he doesn't think the FCA would have investigated unless they were confident of finding wrongdoing.

To help car buyers potentially get some money back Lewis and his team at Money Saving Expert created a tool which will create you a complaint letter if you put in your details.

The day after he launched it (7 February) over 130,000 drivers had used it to create a letter of complaint, a day later (8 February) and that figure had pretty much doubled.

Last night (9 February), Lewis tweeted that almost half a million people had used the tool in the first three days, which means the payout pile could be pretty darn substantial.

According to the expert's estimations, around 40 percent of people complaining were charged more than they should have been and will be eligible for some money back.

He also said that the average payout in these cases would be expected to be around £1,100.