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Can I reclaim PPI on a car loan from a dealership or finance company?

With the deadline on PPI claims fast approaching on the 29th August 2019 you may be scratching your head as to how to claim if you were mis-sold a PPI policy when you financed your car.

Hippo Motor Finance wants to help you have all the facts however so we have tried to gather all the relevant information and links in one place.

Car claims management companies

One word of warning up front, car claims management companies are not the way to go. They don’t add any value to the process but will take some of your potential payout for doing very little, often up to 25% of the claim and some will even charge non-refundable fees so they are best avoided.

Car claims management companies may suggest that their company can get you a faster service but this is untrue as each claim is treated on its own merits and the process around claims and refusals is now very structured after many years of people claiming for mis-sold PPI which is that, once you send your letter (preferably by registered post), you are entitled to a response within 8 weeks – it’s the same if they act on your behalf.

PPI advice

Below you can see some links to organisations that are on your side, have no ulterior motive and are there simply to give advice on how to proceed.

The Money Advice Service is free and gives clear and balanced advice as to how to go about claiming and the steps you can take to do it yourself:

https://www.moneyadviceservice.org.uk/en/articles/reclaiming-payment-protection-insurance

Another good source is the FCA (Financial Conduct Authority), particularly when it comes to the different terms that could have been on your paperwork to indicate that you did in fact have PPI… amazingly they list 11 different names for the same product:

https://www.fca.org.uk/ppi/how-to-check

How do you know if you were mis-sold PPI?

As yourself: was it made clear that the insurance was optional? Did the seller recommend that you take out PPI provided you bought it after 14th Jan 2005? Car Finance PPI was normally sold as a single upfront payment then bundled into the finance – did the seller advise that the insurance part was upfront and that you would be paying interest on the PPI when put into the loan?

If the answer to any of the above is ‘no’ then its highly likely that you were mis-sold. If they “recommended” the policy to you and did not go through a “demands and needs” statement to prove that the policy was of benefit to you – then you may well have grounds for a claim as well. In many cases, unscrupulous sellers advised that your car finance had a much better chance of being approved if you took out PPI finance – on the surface, this sounds plausible as you could theoretically be viewed as being less of a risk but its highly unethical and also incorrect as the two elements of a car finance application and payment protection insurance are very different and if this was the case then you have a good chance of winning your claim.

What to do next?

The first link from the Money Advice Service above has an excellent standard claim template which you can fill out and send to the relevant seller or provider.

A little known fact is that due to the “Plevin ruling” where the high court ruled that if your policy had a commission which was more than 50% of the cost of the PPI then you are entitled to claim the difference and commission percentage on PPI tended to be more than this. Worthwhile considering if you have had a PPI claim rejected in the past and you can resubmit a claim where you should ask for your provider to check for an undisclosed high commission.

Best of luck with your claim – remember the first step is simply to claim using a template or in your own words and the chances are good that you will receive a deserved cheque if you do so before the deadline!

To understand all the ins and outs of your car finance agreement, speak to your account a manager today by calling Hippo Motor Finance on 01254 956 777.

Representative Example of Credit

We expect more than 51% of our customers to achieve this rate.

Loan AmountTotal Cost of CreditRepresentative APR48 Monthly PaymentsDeposit AmountLoan TermTotal Amount Payable
£7,500£3019.1619.1% APR£219.77£048 Months£10,519.16

We are a broker not a lender and our registered office is Trident Park, Trident Way, Blackburn BB1 3NU. Our contact number is 01254 919000

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