Discretionary Commission Arrangements - Complaints and Refunds

You do not need to use a Claims Management Company. You can make the claim directly to the lender and if they reject your complaint you can take it to the Financial Ombudsman Service free of charge, but you must do this within 6 months of the lenders Final Decision Letter.

Advantage Finance

Founded in 1999, Advantage Finance is a UK based car finance company offering Hire Purchase vehicle finance products. Advantage finance was established as a subsidiary of S&U Group of Companies. The financing company claims to provide credit on an “affordable” and “responsible” basis and offers the promise of accommodating customers with low credit scores loans, where other companies may not. 

What is Car Finance?

The immensely popular and lucrative industry of Car Finance first began in the 1910’s and has been growing and developing ever since. In recent years the number of individuals buying into Car Finance agreements has sky-rocketed, with roughly 90% of new cars being obtained through the use of Car Finance. The Finance & Leasing Association recently released figures showing the enormity of the trade as a multi-million-pound industry.

Car Finance companies rely on the constant need for cars to bring in all that cash. With the mounting pressures of work, family commitments, or a general need for travel, most of us will need a car at one time or another. However, finding a way to pay for those four wheels can be difficult. Car Finance offers customers a way to finance their vehicle purchase, without the need for months of saving for lump-sums of cash. When the need for a car is there, but the money for one isn’t, customers have the ability to pay off their vehicle over months or even years.

What Car Finance is available, and what does Advantage Finance Offer?

Car Finance allows customers to pay off the cost of their vehicle over months, or at times, years. There are a few options for different types of Car Finance- these are important to explore prior to purchasing your car product, as different types suit different people.

So what options are available? There are three main choice for car finance, and these are the most commonly used and sold car finance products:

Personal Contract Hire (PCH)- this involves an up-front deposit, monthly fixed payments, and only allows the customer to use the car whilst payments are made- after which the car is returned to the dealer.

Personal Contract Purchase (PCP)- this choice also requires a deposit, plus the fixed monthly payments, however with this option the customer can choose to either hand back the car at the end of the fixed term OR they can pay a “balloon payment” and gain long term ownership of their vehicle.

There is one last popular option, and this is the product that Advantage Finance offers. This is called Hire Purchase (HP).

Hire Purchase.

Hire purchase (HP) allows customers to hire their vehicle from the finance lender, similarly to PCH, however this option gains customers ownership of their vehicle. Hire Purchase (HP) normally involves paying a small deposit (usually to the value of 10% of the vehicles total cost), followed by fixed monthly repayments. It should be noted that these monthly payments may be higher than some other finance options, as the full price of the vehicle is being paid off. Once these monthly payments have been settled, you will have complete ownership over the vehicle.

It’s important for customers to understand that whilst they are still paying off the monthly payments, they do not own the car. This means that until these payments are settled, a customer must not sell the car, and that the car must be properly and appropriately insured, maintained, and in their possession.

If the monthly payments needed to repay the financing of the vehicle are not kept up with, customers risk repossession of their vehicle. This means that not only will they no longer have use of the car, but the large payments also made to obtain ownership will have been in vain. Alongside the risk of vehicle repossession, failure of payment could negatively impact customer’s credit score. Negative impact on credit score can lead to issues obtaining rent contracts, mortgages, future loans or a plethora of other finance products. Customers should always strive to keep a good credit score.

Problems with Advantage Finance and other Car Finance companies.

Car Finance, although promising finance freedom to those in need for a vehicle, often comes at a much larger cost than what it may appear to at first glance. Reportedly the second most complained about finance product, Car Finance accounts for over a third of financial product complaints. Car Finance firms like Advantage Finance often find themselves with thousands of unhappy customers, feeling thwarted and mislead by their Car Finance provider.

Unfortunately, Car Finance is often hard to understand, and sometimes when in the rush to get your new vehicle, small print and hidden factors can be overlooked, and customers can end up in the dark about their Car Finance. In fact, new statistics show that 47% of Car Finance customers don’t know how much money they have borrowed to get their vehicle, that’s a staggering three million people (approx.).

With terms, conditions, and add-ons that often Car Finance providers can even struggle to explain, it’s hardly a surprise that nine out of ten Car Finance customers don’t understand the terms of their Car Finance agreement. Not only can this mean customers find themselves in uncomfortable financial situations, but they can accidently break the terms of their contract, without even realising.

The FCA (Financial Conduct Authority), have had long-held concerns with car finance, and the sky-high number of those in severe dept due to them. Recent findings have shown unfair limitations on Car Finance contract that unjustly penalise customers for the condition of their vehicle and dis-proportionate fees linked to these. There has also arisen proof that lenders have incentivised brokers and car-dealers to overcharge customers in return for larger commissions. This sort of inappropriate charging is deemed as the mis-selling of Car Finance, and if this has happened to you, you may be entitled to a refund or compensation.

What is considered mis-sold Car Finance?

The mis-selling of car finance is extremely common and comes in many different forms. The Finance Conduct Authority (FCA) focuses heavily on ensuring that customers are guided to buy appropriate and best value Car Finance products. Because of this, Car Finance companies hold a “duty of care”, or a responsibility to guarantee that customers are entering in to realistically repayable and “affordable” deals. In the case that a dealer or broker allows customers to enter into a Car Finance agreement that is not financially viable and therefore appropriate, the Car Finance is considered to be mis-sold. Despite the FCA implementing regulations to avoid this, they are often not met, and customers end up in a situation where they are financially unstable and uncomfortable.

There are many ways that Car Finance can be mis-sold, so it is important that anyone who has been sold Car Finance, or is thinking of buying Car Finance, to know how these situations may arise. You may be entitled to compensation or a refund if any of these sound familiar to your Car Finance situation.

  • Car Finance firms have “affordability checks” set in place in order to ensure that customers are able to repay their loan without foregoing hardship. If these checks are not done correctly, resulting in a customer being unable to repay the loan (so long as their financial status has not changed since buying the Car Finance loan) then this Car Finance has been mis-sold.
  • The true owner of the car, be that the lender, the dealership, or a third-party company, MUST be fully explained to the customer before their Car Finance agreement has begun.
  • In the case that a customer chooses one of the other Car Financing options available that do not result in the customer gaining ownership of their vehicle, it is important that it is made completely clear that this is the case. All too often customers are unaware that the monthly payments they are making are not gaining them ownership, or at least that a much larger payment is needed in order for this to occur. The complexity of Car Finance models can make this confusing, and it is important for a customer to know whether a larger “balloon payment” will be needed at the end of the agreed upon repayment period. If the customer is not aware that this is the structure of their loan, they may be unable to make that final payment, and as a result lose possession of their vehicle.
  • At times, customers may feel rushed in their decision when purchasing Car Finance, this should never be the case. Car Finance is a major and often long-term financial obligation and should be thoroughly considered before any paperwork is signed. Customers may feel that they did not have the full terms of their contract explained to them, or that their salesperson was unable to provide them with the appropriate information. If this is the case, the Car Finance may have been mis-sold.
  • Salespersons should also adopt an unbiased opinion towards the car finance agreements, and should always show prospective customers (appropriately affordable) varied lengths of contract, monthly repayment schedules etc. If a salesperson appears to be leading a customer towards a certain option, especially in the case that this is at an extremely high rate, this Car Finance may have been mis-sold.
  • Fines and charges for wear and tear and mileage amassed should be proportionate. If you are being charged a significant amount of money for small issue with the car once it is returned, you may have been mis-sold an unfair Car Finance agreement.
  • Although not an issue linking directly with the financing of the vehicle, if customers are experiencing issues with the car itself, they are entitled to complain.

More about Advantage Finance.

Advantage Finance claim that they are fair, helpful, and give customers the ability to own a vehicle they otherwise would never save enough for. Their company states that they take care in “aligning your budget with the perfect vehicle for you”, but do they always hit the mark on ensuring affordability?

Customers have claimed that taking out Car Finance has left them in a terrible and uncomfortable financial position. One customer says they found themselves paying “well over 100% of the cars value”, whilst others say they ended up paying “eleven grand for an eight grand car”, an amount they were eventually unable to fully pay, which resulted in repossession of their vehicle. On top of the company often leaving customers with massive financial burdens, customers have also complained about their treatment throughout them correspondence with the company. Customers also claim that their Car Finance poorly effected their credit score, and that credit was reported incorrectly by the company.

Many customers felt that their vulnerable situation, whether that be their financial or mental, was taken advantage of and they were treated incredibly poorly. Customers have branded the company “lying clowns” and that they “discriminate against people who have mental health disabilities.” Others have referred to the company as “total cowboys” and “bullies”.

It is important to note that the Financial Conduct Authority has put precautions in place to protect customers from harassment from Car Finance Companies. Many customers of Advantage Finance claim they were “hounded” or “bullied” with emails and calls from Advantage Finance. If these claims are true, then Advantage Finance has broken the law, and customers may be entitled to compensation.

Customers often complain about the unprofessionalism of the company’s reps, and that they often adopt a “don’t want to know” attitude towards their customers issues and complaints. It has been said multiple times that the company has “no compassion” and that the poor financial state the customers have been left in is “life ruining”.

If these circumstances seem familiar to you and your Car Finance situation then you could be entitled to a refund or to compensation and be able to get back the money you have lost through the mis-selling of your Car Finance.