Former car dealer alleges practices allowing mis-selling of motor finance

ITV News Consumer Editor Chris Choi has spoken to a whistle blower who reveals practices he says harmed customers’ finances

ITV News can reveal new evidence about the alleged mis-selling of motor finance deals as millions of UK drivers continue to hope for compensation.

The Financial Conduct Authority is investigating so-called “discretionary commissions” which allowed dealers to vary interest rates on car loans.

There’s evidence that the higher the rates, the greater the commissions many of them earned.

Now we’ve spoken to a whistle blower who reveals practises he says harmed customers’ finances.

He told us: “They’d come in expecting not to get finance, so they’d just say yes to the first offer at 17.9% APR when realistically we could get them 8.9%, so they were paying top whack for something they didn’t have to pay top whack for”.

We asked him about what information buyers got on commissions earned by dealers who sold loans, he told us “they could request information with head office and we would say it takes 30 days to get that information, but we have to stop the sale, they’d basically then just brush that off and say I want the car before we had to disclose anything”.

Speaking to ITV News, Adrian Daly of the Finance and Leasing Association said there has been no car loans “scandal” and says few will be entitled to payouts.

He says dealers followed the official rules on commission disclosures that existed at the time.

He says most people got good deals even when commissions were involved.

Buying a vehicle is second only to house buying in terms of being one of the biggest purchases most of us make.

Motor finance is big business, worth around £21 billion a year, and involving 2 million purchases.

In the coming months, the full story of motor finance is expected to be revealed through court cases and official reviews.

Watch this space.