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  • Writer's pictureMis-sold Car Finance

Mis-sold Car Finance. Were you mis-sold your cars finance? Maybe it's time to make a claim?

MIS-SOLD CAR FINANCE. WERE YOU MIS-SOLD YOUR CAR FINANCE? MAYBE IT’S TIME TO MAKE A CLAIM.



From the outset taking out finance to purchase your car is fraught with many dangers. Interest rates, car depreciation, insurance requirements to name a few.


Here are a few pointers on why taking out car finance is not such a great idea and at the end if you feel you have been mis-sold car finance the way to make your claim for compensation today.


Taking out a car loan can have some downsides, such as:


  • You may end up paying more for the car than its actual value, due to interest costs, fees, and depreciation.

  • You may be upside down on the loan, meaning you owe more than the car is worth, which can be risky if you need to sell the car or if it gets totaled in an accident.

  • You may have to carry full coverage insurance, which can be expensive, as a requirement from the lender.

  • You may have difficulty getting approved for a loan, especially if you have a low credit score or a high debt-to-income ratio.

  • You may face prepayment penalties if you pay off the loan early, which can reduce the benefits of saving on interest.


If you are considering taking out a car loan, you should weigh the pros and cons carefully and compare different options to find the best deal for your situation. You can also use online tools to calculate how much you can afford to borrow and how much interest you will pay over the loan term.


The length of time it takes to pay off a car loan depends on several factors, such as:


  • The amount you borrowed and the interest rate you agreed to pay.

  • The loan term, which is the number of months or years you have to repay the loan.

  • The monthly payment, which is how much you pay toward the loan every month.

  • Any extra payments you make which can reduce the principal and the interest.

However, you can pay off your car loan faster by using some of the strategies suggested by another source, such as:

  • Refinancing with a new lender for a lower interest rate or a shorter loan term.

  • Making biweekly payments instead of monthly payments, which will result in one extra payment per year.

  • Rounding your payments to the nearest hundred or adding a small amount to each payment which will lower the principal faster.

  • Opting out of unnecessary add-ons, such as gap insurance or extended warranty, and applying the refund to your loan balance.

  • Making a large additional payment whenever you have extra cash, such as a tax refund or a bonus.


Paying off your car loan early can have some benefits, such as saving money on interest, freeing up your budget, and owning your car outright. However, there may also be some risks, such as prepayment penalties, temporary credit score dips, or opportunity costs. Therefore, you should weigh the pros and cons carefully and compare different options to find the best deal for your situation.


According to different sources, the average payment for a car loan in the UK varies from £173.30 to £226 per month, depending on the type of car, the loan term, and the interest rate. However, this does not include the running costs of owning a car, such as insurance, tax, fuel, and maintenance, which can add up to another £162 per month on average. Therefore, the total cost of owning a car in the UK can be around £400 per month or more.


If you are thinking of taking out a car loan, you should consider your budget and compare different options to find the best deal for your situation. You can also use online tools to calculate how much you can afford to borrow and how much interest you will pay over the loan term.


The average interest rate for a car loan in the UK may vary depending on the type of car, the loan term, and the credit score of the borrower. According to one source, the average annual rate for new car loans was 8.4% in June 2023. 

Another source suggests that an APR of between 7% and 12% could be considered competitive. However, these rates are representative examples, meaning only 51% of successful applicants have to get the rate that’s advertised. The actual rate you get may be higher or lower depending on your personal financial circumstances.


If you want to find the best deal for your situation, you should shop around and compare different options before you commit. You can also use online tools to calculate how much you can afford to borrow and how much interest you will pay over the loan term.


Yes, you can pay off your car loan early in the UK, but there are some things you need to consider before doing so. Depending on the type of car finance you have, such as personal contract purchase (PCP) or hire purchase (HP), you may have different options and costs for ending your agreement early.


One option is to use your legal right to voluntarily terminate your car finance agreement, which allows you to return the car and walk away without paying any extras. However, you can only do this if you have paid off at least half of the total amount due, and you won’t get anything back for the payments you have already made.


Another option is to pay off the remaining balance of your car finance in full, which means you will own the car outright. However, you may have to pay some early repayment fees, which can vary depending on your lender and the terms of your agreement. You may also be in negative equity, meaning you owe more than the car is worth, which can be risky if you want to sell the car or trade it in.


Before you decide to pay off your car loan early, you should weigh the pros and cons carefully and compare different options to find the best deal for your situation. You can also use online tools to calculate how much you can afford to borrow and how much interest you will pay over the loan term.


If you feel you have been mis-sold your car finance between 2010 and 2021 contact Claimline Legal UK now. Call us on 0800 779 7457 or go to our claims website at www.missoldcarsfinance.co.uk



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