The FCA is investigating the use of discretionary commissions arrangements between motor finance providers and brokers. Specialist Motor Finance have never used discretionary commission arrangements, as such none of our customers are impacted. Our agreements state that we pay a commission to our brokers but there is no discretion for the broker to impact the customer rate.

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25th November 2024

Dealing With Car Finance Debt

Car finance is a hugely popular solution for drivers looking to purchase a vehicle without having to pay for it upfront. However, if payments become unmanageable it can be come a source of stress and place financial strain on an individual.

Sadly, with the cost of living crisis, there has been an increase in those struggling with payments. In cases such as this, it is crucial that you understand the options available to you in order to regain control of your financial wellbeing.

 

Steps to take when struggling with payments

Understand your car finance agreement

Your options and rights when it comes to car finance issues will differ depending on your agreement, therefore you should ensure you understand which specific agreement you have in place. This may be:

Hire Purchase (HP) – Spreads the full cost of the vehicle over monthly payments, with ownership transferring to you after the final payment. (For SMF customers, this is the agreement that will be in place).

Personal Contract Purchase (PCP) – Involves lower monthly payments with a final ‘balloon’ payment at the end to purchase the car outright.

Personal Loans – Used to buy the car outright, meaning you own the car immediately.

Contact your lender early

If you anticipate missing a payment, reach out to your lender as soon as possible. Ultimately lenders are there to support you in making repayments, and therefore contacting them as early as possible when you are experiencing financial difficulties can make all the difference in resolving any issues.

Seek expert advice

Our partnership with StepChange means that our customers receive access to free and impartial debt advice tailored to their individual circumstances as well as free budgeting tools to support them throughout the process.

Find out more information about StepChange and the support you can receive here.

Dealing with car finance debt can feel overwhelming but taking prompt and informed action can make a significant difference. By understanding your rights, seeking professional advice, and working with lenders, you can regain financial stability and put yourself back in control.