PPI Car Finance: Understanding Your Rights and Potential Claims

Payment Protection Insurance (PPI) was widely sold alongside various financial products, including car finance agreements. It was designed to cover repayments if you couldn’t work due to illness, accident, or unemployment. However, PPI was often mis-sold, leading to widespread claims and substantial payouts.

Was PPI Mis-Sold on Your Car Finance?

Several factors could indicate that your PPI was mis-sold. Consider the following questions:

• Were you pressured into taking out PPI?
• Were you told that your car finance application would be more likely to be approved if you took out PPI?
• Were you unaware that PPI was included in your agreement?
• Were you not informed about the cost of the PPI policy?
• Were you told PPI was compulsory, when it wasn’t?
• Were you not asked about existing cover you may have already had, like sick pay or other insurance?
• Were you self-employed, retired, or had pre-existing medical conditions that would have made it difficult to claim on the policy?

If you answered “yes” to any of these questions, you may have been mis-sold PPI on your car finance agreement.

The PPI Deadline and Beyond

The official deadline for making PPI claims through the Financial Ombudsman Service (FOS) was August 29, 2019. However, there are still avenues to explore, particularly if you have evidence of undisclosed commission relating to your PPI policy.

Plevin Rule and Undisclosed Commission

The “Plevin” rule came about after a court case that found that PPI policies with excessively high commissions, which weren’t disclosed to the customer, were unfair. If the commission earned by the lender from your PPI policy was significantly higher than the amount you paid for the policy, and this wasn’t disclosed, you might still have a claim. This is regardless of whether you were mis-sold the policy based on the typical mis-selling reasons.

How to Check for PPI and Make a Claim

Gather any documentation related to your car finance agreement, including credit agreements, statements, and letters. Look for mentions of PPI, payment protection, or similar terms. If you can’t find your documents, you can contact the finance company and request copies.

Even though the official deadline has passed, it’s worth investigating if you suspect your policy had a high level of undisclosed commission. You can contact the lender directly to request information about the commission they earned on your PPI policy. If you believe the commission was excessive and undisclosed, you can pursue a complaint through the lender’s complaints process and, if unsatisfied, escalate it to the Financial Ombudsman Service (FOS). Keep in mind that the FOS will assess these cases based on fairness and may consider the specific circumstances.

While the odds might seem stacked against you after the deadline, exploring the potential for a Plevin claim based on undisclosed commission is still a worthwhile endeavor, potentially leading to a refund of a portion of the PPI premiums you paid.