Discretionary Commission Arrangements - Complaints and Refunds

Go Car Credit

Founded in 2017, Go Car Credit is a Car Finance company who claim to have “approved over 117,000 loans for consumers” since their launch. Go Car Credit provides car financing options to a wide range of customers, with a large focus of theirs being to provide finance to those who are unable to obtain a loan by other means.

What is car finance?

Launched in the 1910’s, Car Finance is an immensely lucrative and popular industry. The Car Finance industry has been exponentially rising in popularity for the last 110 years and has been developing ever since with new options and products available to customers. With roughly 90% of new cars bought in the UK being obtained through the means of Car Finance, it is clear to see why this business is not going anywhere anytime soon. In fact, The Finance & Leasing Association have recently released figures showing Car Finance to be a multi-million-pound industry.

So, what is it that fuels this industry, that keeps this money rolling into Car finance lenders? It’s the constant need for cars. In today’s world, with work and school back to in-person sessions; cuts to public transport; and the need to travel always looming, being without a car is simply not an option for many of us. Despite the need, sometimes the money needed to get that vehicle isn’t there up front, no matter how much we need it. Car finance gives customers the ability to get their vehicle, when they need it- no need for months of saving or lump-sums of cash. The cost of the car is paid-off over months or even years, with sometimes-hefty interest rates tacked on top of it.

What car Finance is available, and what does Go Car Finance Offer?

Car Finance is available to customers who are unable or do not wish to pay up front for their vehicle. There are a few different types of Car Finance available for customers to choose from, and it is always important that customers choose a Car Finance product that is best for their wants and needs.

Let’s have a look at what options are available and what each of these options entails. There are three main types of Car Finance:

Personal Contract Purchase (PCP) – This choice requires customers to put down a small deposit on the car, followed by monthly pre-approved payments. At the end of the fixed term, customer can either opt to give back the car to the dealer, or to pay a larger payment (also known as a balloon payment) and gain ownership of their car. Customers opting for this option will end up paying significantly higher long-term than is they were to pay the cars total upfront.

Personal Contract Hire (PCH) – Personal contract hire involves an up-front deposit on the car, followed by fixed monthly repayments. Whilst the payments are being made, the customer can use the car. However, once the payments have finished and the car is repaid, the customer no longer has right to use the car.

The option offered by Go Car Finance, and a very popular Car Finance Option is called Hire Purchase.

Hire Purchase (HP) works similarly to PCH, in that it involves the customer essentially hiring their vehicle from the finance lender, however this option means that customers gain ownership at the end of the fixed payment period. Hire purchase, like the two other options aforementioned, first begins with the customer paying a deposit on their vehicle. This deposit is usually 10% of their vehicles value. The monthly payments that follow this deposit may be higher than some other finance options- this is due to the fact that the vehicle is being fully paid off in order to gain the customer full ownership. Once these payments have finished, the contract with the finance company is finished, and the customer can drive away with their new car, no longer owing any money to the Car Finance company.

A key factor that is important for customers to understand is that during the repayment period, they do not have any legal ownership of the car. During this time the vehicle is under the ownership of the Car Finance company, or in some cases a third-party company. Whilst the payments are ongoing, the customer must adhere to certain rules, for example the car must not be sold, it must be appropriately insured and maintained, and always in their possession.

Customers opting to use Hire Purchase should also note that is any of their repayments are not paid on time and to the correct amount, they run the risk of having the vehicle repossessed. Repossession of the car would not only leave customers without a vehicle but would also mean that the payments they have already paid count for nothing. As Hire Purchase payments are higher (as they result in ownership) this would be a massive loss for the customer.

Failure to pay the agreed payments could also severely negatively impact customers credit scores. It is important to look after your credit score, as poor credit score could cause issues obtaining mortgages, further loans, and in some cases can act against you when applying for a new job.

Problems with Go Car Finance and other Car Finance Companies.

Car Finance is, as mentioned above, incredibly popular. It offers a great alternative to upfront car payment and promises finance freedom to customers. However, paying for a vehicle through finance often comes with a much bigger hidden price tag than many customers realise. Car Finance is the second most complained about finance product, accounting for over a third of all finance product complaints. Companies like Go Car Finance receive thousands of unhappy customer complaints every year, from people feeling mistreated, lied to, and taken advantage of.

Sometimes Car Finance can be very hard to understand, even to those who are used to paying loans and other finance products. The complex and varied agreements and terms and conditions can be made all the more easy to misunderstand when they are coupled with frantic and desperate customers, needing to obtain their vehicle ASAP! It’s easy to understand why people end up in the dark about their Car Finance agreement, however it is worrying that car Finance companies do not do more to ensure that customers understand the deals they are entering into. It’s shocking to find out that new statistics show nine out of ten Car Finance customers don’t understand the terms of their Car Finance Agreement. This means that customers can find themselves in uncomfortable financial situations, such as dept, and can often end up accidentally breaking the terms of their contract, without even realising.

Not only are terms of agreements being confused, many customers are also unaware of how much money they have borrowed to pay of their vehicle. In fact, a staggering 47% of Car Finance customers don’t know how much money they have actually borrowed to get their vehicle, that equates to approximately three million people.

The FCA (Financial conduct Authority) have long expressed concerns about the Car Finance industry, and strive to cut down on the increasing number of those in detrimental amounts of dept to them. Deep dives into the Car Finance industry have uncovered unjust and extreme conditions that many customers must meet when maintaining their vehicles, and the dis-proportionate fees linked to them. There has also arisen a trend of lenders illegally incentivising brokers and car-dealers with hefty commissions in return for over-charging of their customers. This, sadly, is not at all uncommon within the Car Finance industry and means that customers could be entitled to a refund or compensation.

What is Considered to be Mis-sold Car Finance?

Car finance being mis-sold is a very common issue and it is important that customers know the ways it can occur to protect themselves against it. Car Finance companies hold a “duty of care” or a responsibility to guarantee that customers are only sold Car Finance products that are appropriate for them, and that are “affordable”. This is policed by the Finance Conduct Authority (FCA), where ensuring customers are guided to appropriate purchase plans is a massive focus.

If a customer is sold an agreement that is not “affordable” for them, and is not financially viable for them to repay, then the Car Finance is considered to be “mis-sold”. Despite best efforts from the FCA, some Car Finance companies still miss the mark time and again on ensuring their Car Finance agreements are affordable, and customers can end up in uncomfortable financial positions.

What are some further examples of situations where Car Finance has been mis-sold? Customers should keep themselves aware of these, as they could be entitled to a refund, or compensation.

  • There are “affordability checks” that Car Finance providers must use to ensure that the Car Finance they are selling is appropriate for their customers. This means that a customer has to be able to repay the loan without foregoing hardship- this is based off of the customers financial situation and their finance history. In the event that these checks are not carried out correctly, customers may be left unable to pay off their loan, meaning they have been mis-sold Car Finance (so long as their financial situation has not significantly changed since the Car Finance was procured).
  • Customers must be made aware of who the true legal owner of their car is at all times during their Car Finance agreement, and in the case that they are not able to gain ownership at the end of their agreement, this must be made clear. In many cases, customers enter into Car finance agreements with the misunderstanding that they will legally own their car once their contract has finished, without any further payments. If this misunderstanding occurs, customers may find themselves in a situation where they are unable to produce the balloon payment needed to gain ownership, and thus loose ownership of their vehicle.
  • Sometimes customers can feel rushed into buying certain Car Finance Products or feel that their options were not properly explained to them. If a customer does not have the full terms of their agreement explained to them, or they feel that the salesperson did not have the understanding to explain it to them, they may have been mis-sold their Car Finance.
  • It is crucial for Car finance salespersons to always be unbiased in their presentation of car finance options. They must present (affordable) contracts of all lengths and schedules etc. If they are leading in their pitch, then this can be considered mis-selling.

More about Go Car credit.

Go Car Credit highlight on their website that they are empowering those with poor credit scores to be able to finance their cars. They claim that they are focused on “providing excellent customer service and achieving fair customer outcomes”. However, with the promise of providing finance options to those with a poor credit score, comes a high price-tag, that leaves many wishing they had never chosen Car Finance to begin with. Go Car Credit have a 49.6% APR representative, meaning if you borrowed £5,000 for a vehicle, and repaid this over the course of a year, you would be paying approx. £1,423 in interest alone. If you are struggling financially, this can have an absolutely massive impact on your life.

Many customers of Go car Credit claim that they have been spoken down to, harassed and even “abused’ by the company, and that they are not treated with the respect they deserve. They have been called “cowboys” and many customers recommend staying far away from the massive Car Finance lenders. Alongside this, floods of customers have been left completely unable to repay their loan, and as a result have had their car repossessed, or have found themselves in massive holes of dept and money troubles. To add insult to injury, some customers have found that their credit score has been negatively affected by their Car Finance experience with Go Car Credit, keeping them in a loop of loans and issues.

If this sounds familiar to your experience with Car Finance, then you could be entitled to a refund or to compensation.