July 3rd 2024.
Are you a car owner? Do you feel like you're constantly losing money on your vehicle? Between petrol costs, insurance, and MOTs, it's no surprise that owning a car can take a huge chunk out of your monthly income. And if you're still paying off your car on finance, that's even more money down the drain. But fear not, because Martin Lewis, the Money Saving Expert, has some good news for you. He has revealed a way for car owners to potentially reclaim thousands of pounds that they are owed.
It turns out that if you bought your car, van, campervan, or motorbike on finance, you may be entitled to compensation. The Financial Conduct Authority (FCA) has launched an investigation into something called Discretionary Commission Arrangements (DCA). Basically, this is when a finance company allows car dealers to increase interest rates without informing the customers. And as you can imagine, this earns them a huge commission. Martin explains in his newsletter that this could mean you have overpaid for your vehicle without even realizing it.
According to data from the FCA, 40% of car finance agreements between April 2007 and January 2021 had DCAs. However, a survey by MSE (Money Saving Expert) suggests that the percentage may be even higher at 74%. With this in mind, Martin is urging car owners to use MSE's free tool to make a complaint. He believes that once the FCA's investigation closes on September 25th, there may be a cut-off point for complaints. So, if you want to have a chance at receiving compensation, it's important to complain before that date. Since MSE launched their tool in February, over 1.7 million complaint letters have been sent.
You may be eligible to make a complaint if you purchased a vehicle on finance between April 2007 and January 2021, through Personal Contract Purchases or Hire Purchases. Unfortunately, this does not apply to Personal Contract Hires. There are also some conditions to be aware of. The vehicle must have been purchased for personal use, not for business use. And even if the original owner has passed away, their executor or beneficiary can still make a claim on their behalf.
Don't worry if you have already paid off your vehicle or no longer own it. You can still make a claim and get the money back in your pocket. As Martin wrote in this week's newsletter, there are still many unknowns about the situation. His advice? Complain now, as there may be a time-bar introduced when the investigation ends. So, the sooner you complain, the less likely you'll be caught out by any potential rules or limitations.
Now, let's talk about saving money during your summer holidays. Even if you booked your trip well in advance, there are still ways to save and put that extra cash towards making memories. Martin Lewis, the Money Saving Expert, stresses the importance of keeping a close eye on prices and constantly checking for the best deals.
One important tip to keep in mind when traveling abroad is how to pay for purchases. Martin recently wrote a blog post about the pitfalls of paying in pounds when using a card abroad. This applies to both Visa/Mastercard and cheap travel credit cards. When paying in the local currency, the bank does the conversion for you, but this typically includes a 3% load. So, if you spend £100 worth of euros, it will actually cost you £103. However, if you use a travel credit card, you will get the full £100 worth of euros for just £100.
On the other hand, if you choose to pay in pounds when using your card, you can expect to pay what is known as 'dynamic currency exchange'. This means that the foreign bank will do the conversion for you when you make a purchase or withdraw money from an ATM. As you can imagine, this can end up costing you more in the long run. So, the next time you're on holiday, be sure to pay in the local currency to save yourself some money.
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