Exposing the Myths Around Car Finance Claims

Across the UK, millions of drivers are waking up to a harsh reality: the car finance deals they signed were potentially mis-sold, leaving them hundreds—or even thousands—of pounds out of pocket.

Hidden fees, dodgy advice, and shady commissions have led to a surge in car finance claims as people fight to take back what’s rightfully theirs.

Yet, despite the growing number of complaints, plenty of myths still swirl around, putting many people off from even checking whether they’re eligible. If you’ve been wondering whether it’s worth pursuing, here’s the truth behind some of the most common misconceptions about car finance claims and why you shouldn’t let them stop you.

1. “You can’t claim if you’ve already paid off the agreement.”

Wrong.

This is one of the biggest misunderstandings out there. Whether you’re still paying off your car or cleared the balance years ago makes no difference. If your agreement was mis-sold—whether because of hidden commissions, lack of proper explanation, or failure to check affordability—you could still have a valid claim.

In fact, many successful claims today involve people who finished their deals long ago. Compensation is based on how the agreement was sold, not whether the finance is active. So if you’re thinking, “It’s too late for me”, think again.

1. “You need all the original paperwork to make a claim.”

Not true.

Mis-sold finance doesn’t disappear just because you’ve lost a few documents. While having copies of your agreement, quotes, and emails can speed things up, lenders and brokers are legally obliged to keep records of your deal. If needed, your claims handler or solicitor can request them directly.

Don’t let missing paperwork put you off.

1.  “It’s too expensive to make a claim.”

Incorrect.

One of the main reasons people hesitate is the fear of costs. But in reality, most firms offer a no-win, no-fee service, meaning you won’t pay anything upfront. You only pay if your claim is successful, and the fee usually comes out of the compensation you receive.

1. “You can’t claim if you don’t own the car anymore.”

Completely false.

Ownership of the vehicle is irrelevant. Whether you sold the car, traded it in, handed it back, or it’s gathering dust on someone else’s driveway, it doesn’t change the fact that you could have been mis-sold finance.

What matters is the deal you signed, not what you did with the car afterwards. If the terms were unfair or hidden from you at the time, you could still be entitled to a refund or compensation today.

1. “Only luxury cars are eligible for claims.”

Definitely not.

There’s a misconception that only people who bought flashy, top-end vehicles can make a claim. That’s simply not true. Mis-selling can (and does) happen across all types of finance agreements, from city hatchbacks and family saloons to work vans and affordable electric vehicles.

No matter the make, model or value of the car, if you weren’t given the right information when you signed the finance deal, you could have grounds for a claim.

1. “You need a solicitor to make a car finance claim.”

Not necessarily.

While using a solicitor can make the process smoother, especially if the lender tries to dispute your case, you don’t have to hire one to make a claim. Many people start by complaining directly to the finance company or taking their case to the Financial Ombudsman Service.

However, if your case is complex, or you simply want expert support, having a solicitor in your corner can take the pressure off and boost your chances of success.

1. “Solicitors won’t help with car finance claims.”

Not true.

As we saw, it’s possible to handle a car finance claim yourself, but saying that solicitors won’t help simply isn’t accurate. A good law firm can spot issues that you might miss, challenge unfair rejections, and negotiate stronger settlements.

They also know how to deal with finance companies that try to delay or complicate the process. Although you can start a claim independently, having professional support often makes the journey less stressful and more effective, especially if the case isn’t straightforward.

1. “The government will step in and stop payouts to protect the industry.”

Unlikely.

There’s no evidence to suggest the government plans to block compensation for mis-sold car finance agreements. Regulators like the Financial Conduct Authority (FCA) are leading the review to ensure fair outcomes for consumers, not to shield lenders from the consequences of poor practice.

While some lenders have warned about the potential financial impact, the priority remains consumer protection. Just as with the PPI scandal, the system is designed to hold firms accountable, not sweep problems under the carpet.

Taking back control

If you have been told one of the myths above, beware: these myths were never designed to protect you. They served only to protect the profits of those who failed to play fair in the first place.

Every driver who turns away because of a rumour is one more victory for an industry that thought no one would fight back.

But the truth is simpler. If you were mis-sold car finance, you have the right to challenge it. You have the right to ask questions. You have the right to demand better. And no excuse, no rumour, no myth should stand in your way.