Hire Purchase Mis Selling: What Went Wrong and What You Can Do Next

If you bought a car on Hire Purchase (HP), you probably remember the “easy monthly payments” chat and the quick signatures at the dealership. And maybe you still feel a bit uneasy about what you agreed to.

You’re not imagining it. Over the last few years, motor finance complaints have surged — and hire purchase (motor) is now one of the most complained-about products at the Financial Ombudsman Service (FOS). In 2024/25, FOS received 76,160 hire purchase (motor) complaints, up from 21,441 in 2023/24.

So what actually went wrong? And what can you do now — without getting overwhelmed?

First: what “Hire Purchase” means

With HP, you pay a deposit (sometimes £0), then fixed monthly payments, and you typically own the car at the end once everything’s paid. It’s different from PCP in a few ways, but the mis-selling issues can overlap because the sales process is often the same.

If the agreement wasn’t explained properly, the numbers weren’t transparent, or you weren’t treated fairly when affordability was assessed, that’s where problems start.

If you’re unsure what you had, Claim First covers mis-sold PCP and HP style car finance claims.

What went wrong with HP mis-selling

Mis-selling isn’t always “they lied to your face.” A lot of it is quieter than that — missing information, unclear pricing, and incentives that weren’t explained.

Here are the most common issues:

1) Hidden or unclear commission

In many motor finance deals, a broker/dealer earns commission from the lender. The problem is when you weren’t told, or it wasn’t explained clearly enough for you to make an informed choice.

This is a huge reason motor finance complaints have exploded — and it’s one reason the FCA has been working on a wider redress approach.

2) “Your rate is your rate” — when it didn’t have to be

Some customers were put on higher interest rates than necessary. Even if the monthly payment felt “manageable,” you may have paid hundreds or thousands more than you needed to over the term.

3) Affordability checks that didn’t really happen

Lenders and brokers should consider whether the agreement is affordable without putting you under pressure (missed bills, juggling credit, constant overdraft use, etc.). When those checks are rushed or ignored, it can lead to people being approved for finance they realistically couldn’t afford.

4) The agreement wasn’t properly explained

This happens a lot. You’re shown a monthly number, not the bigger picture:

• total amount payable

• interest rate/APR and how it was set

• term length and what happens if you settle early

• what happens if you miss payments

If you left thinking “I’ll figure it out later,” that’s a red flag.

Why it’s such a big deal right now (UK context)

This isn’t niche. The FCA has proposed a mass redress approach for motor finance and has referenced millions of complaints already made — signalling how widespread this could be.

And the complaints volumes are real: the Financial Ombudsman Service reported receiving over 305,000 complaints in 2024/25, with motor finance among the areas seeing significant rises.

In other words: if you’re thinking “surely it can’t be that common”… it is.

What you can do next (step-by-step, no drama)

Step 1: Work out what you actually signed

Start with the basics:

• HP or PCP?

• lender name (the finance company, not just the dealership)

• start date and term length

• APR / interest rate

• total amount payable

If you don’t have paperwork, you can still move forward — agreements can often be retrieved.

Step 2: Write down what you were told (and what you weren’t)

You’re building a simple timeline:

• What did the salesperson focus on? (“Only £___ per month…”)

• Were you told about the commission?

• Were you shown different finance options?

• Did anyone ask proper affordability questions?

Even rough notes help.

Step 3: Complain to the lender (not the dealer)

In most cases, your complaint goes to the finance provider (the lender). That’s normally the firm responsible for the agreement and the sales process tied to it.

Step 4: If you hit a wall, escalate

If you get nowhere, or the answer feels like a brush-off, you can usually escalate to the Financial Ombudsman Service.

Also worth knowing: the FCA has explicitly said many people don’t need to use a claims management company or law firm to complain — you can do it yourself.
That said, if you want someone to handle the admin, chasing, and arguments (especially if you’re busy or just fed up), that’s where support can help.

What you could get back (and what “compensation” can look like)

Every case depends on the agreement and what went wrong, but successful outcomes can include things like:

• a refund of interest/charges linked to the unfair part of the deal

• adjustments to the agreement balance

• in some situations, changes to credit file reporting

Claim First’s own guidance suggests mis-sold car finance refunds often fall in the £1,500–£5,000 range (case-dependent, not guaranteed).

FAQs

Was Hire Purchase mis-selling only about PCP?

No. PCP got a lot of headlines, but HP customers can be affected too. The mis-selling issues often come from the sales process: commission, unclear pricing, and poor affordability checks.

Do you need your original agreement to make a complaint?

It helps, but it’s not always essential. You can often retrieve key details from the lender. If you’ve got bank statements showing the payments and you know roughly when the agreement started, that’s a solid start.

Will making a complaint affect your car or your credit score?

Making a complaint itself shouldn’t harm your credit score. If you’re still paying the agreement, keep making payments unless you’ve been specifically advised otherwise — the complaint is about whether the deal was fair, not whether you should stop paying.

What if you settled your HP agreement years ago?

You may still be able to complain, depending on timings and your circumstances. It’s worth checking rather than assuming it’s “too late,” especially given how widespread motor finance complaints have become.

How much could you get back?

It depends on the agreement, the rate, and what went wrong. Some people may recover hundreds; others potentially thousands. Claim First notes many successful claims land around £1,500–£5,000 (not guaranteed).

Do you have to use a claims company or solicitor?

No — and the FCA has been clear that many people can complain without using a third party.
But if you want help gathering evidence, handling the back-and-forth, and pushing your case properly, you can choose to use support.

If you believe you have been treated unfairly, Claim First is here to help you take action with confidence. Whether you’re dealing with a mis sold car finance claim, seeking expert payday loan refund services, or need trusted housing disrepair services to challenge poor living conditions, their experienced team will guide you every step of the way. Claim First also offers dedicated scam recovery services, helping you recover funds lost to fraud quickly and professionally. Don’t let lenders, landlords, or scammers benefit from unfair practices — start your claim today and let Claim First fight for the compensation you deserve.