MotoNovo Finance Claims: A Comprehensive Guide to Reclaiming Your Money

Alisa Dan

26 March 2025

Were you sold car finance by MotoNovo? You might be entitled to compensation due to hidden commissions and mis-selling practices. The Financial Conduct Authority has identified widespread issues in car finance agreements, affecting thousands of motorists who financed vehicles through MotoNovo.

Recent regulatory changes have opened doors for car owners to reclaim substantial sums. Average claims reach thousands of pounds, yet many consumers remain unaware of their eligibility. Acting now ensures your claim falls within limitation periods while maximizing potential compensation.

MotoNovo Finance operates throughout the UK, offering Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements through dealerships. Like many finance providers, their practices have come under scrutiny following investigations into hidden commission arrangements.

What Is a MotoNovo Finance Claim?

A MotoNovo finance claim seeks compensation for car finance agreements that weren't sold properly. Claims focus on undisclosed commission arrangements between MotoNovo and dealerships that inflated interest rates without customer knowledge.

The core issue involves discretionary commission arrangements where dealers could adjust interest rates to boost their commission. This created a conflict of interest – dealers earned more by charging higher rates rather than securing the best deal for customers. The Financial Conduct Authority deemed this practice unfair to consumers.

Compensation varies based on individual circumstances. Successful claims typically include a portion of interest paid plus 8% statutory interest. For agreements spanning several years, this adds up quickly. Claims specialists report average payouts between £2,000 and £5,000, with some claims exceeding these amounts depending on the finance term and amount borrowed.

Understanding Mis-Sold Car Finance Claims

Mis-sold finance claims arise when consumers enter agreements without knowing key information that would affect their decision. Regulatory authorities have identified several practices that constitute mis-selling, particularly related to how commission was structured and disclosed.

The main issue centers on dealerships being allowed to set interest rates within ranges specified by lenders like MotoNovo. Higher rates generated larger commissions for dealers. Customers weren't told about these arrangements or how they affected monthly payments, preventing informed financial decisions.

Beyond hidden commissions, other mis-selling practices include poor affordability checks, unclear explanation of terms, sales pressure tactics, and misrepresentation of financial products. Each of these breaches consumer protection regulations and forms the basis for compensation claims against MotoNovo.

How to Identify If Your MotoNovo Finance Agreement Was Mis-Sold

Start by reviewing your original finance documentation. Look for disclosure statements about commission arrangements between the dealer and MotoNovo. Most agreements with valid claims contain no mention of commission structures or how they might affect interest rates.

Consider the sales experience itself. Warning signs include feeling rushed to sign paperwork, receiving vague answers about interest rates, or feeling pressured to choose specific finance products without seeing alternatives. Sales representatives should have clearly explained the total cost, interest rates, and all fees.

Check whether the finance agreement suited your financial situation. Finance providers must ensure their products are appropriate and affordable for customers. If affordability assessments seemed rushed or if monthly payments proved higher than initially discussed, these factors suggest potential mis-selling.

Key Eligibility Criteria for a MotoNovo Finance Claim

Both Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements qualify for claims, as these financing methods often involved the commission arrangements under investigation. Active agreements and those already settled can both qualify.

Timing is crucial for eligibility. Claims must typically be filed within six years of signing the agreement or three years from discovering potential mis-selling. For many consumers, the "discovery date" began when regulatory findings became public, extending the claim window. Agreements dating back to 2007 may qualify, though older contracts require more documentation.

The presence of discretionary commission arrangements forms the core requirement. These arrangements existed between MotoNovo and dealerships, allowing dealers to increase interest rates to earn more commission. While consumers generally can't directly determine if such arrangements existed, claims specialists can identify potentially affected agreements based on specific patterns.

Steps to File a MotoNovo Finance Claim

Start by gathering all relevant documentation: your original contract, correspondence with MotoNovo or the dealership, and payment records. These documents establish the agreement terms and help identify missing disclosures.

Decide whether to pursue the claim yourself or through a specialist. While self-representation is possible, claims specialists offer expertise in identifying valid claims and navigating financial regulations. Many work on a no-win, no-fee basis, taking a percentage of successful compensation while eliminating upfront costs.

Submit a formal complaint to MotoNovo detailing why you believe the finance agreement was mis-sold. Reference undisclosed commission arrangements and their effect on your interest rates. MotoNovo must respond within 8 weeks. If unsatisfied with their response, escalate to the Financial Ombudsman Service for independent assessment and binding decisions.

Common Issues with MotoNovo PCP and HP Agreements

High interest rates compared to market averages often indicate hidden commission arrangements. While rates naturally vary based on credit profiles, unexplained premium rates without corresponding credit issues suggest potential problems. Many customers discover they were charged significantly more than their credit profile warranted.

Poor explanation of agreement terms creates another common issue. Finance agreements contain complex elements including balloon payments, mileage limitations, and ownership conditions. These require clear explanation, yet many customers report receiving minimal information or feeling rushed through explanations.

Affordability concerns arise when agreements strain customer budgets beyond reasonable levels. Responsible lending requires thorough affordability assessments to ensure payments remain sustainable throughout the agreement. Claims specialists have identified instances where MotoNovo approved agreements despite inadequate income verification or existing financial commitments that should have raised concerns.

Types of Compensation in MotoNovo Claims

Interest refunds form the primary compensation component. When discretionary commission arrangements artificially inflated interest rates, claimants receive refunds of the additional interest paid. This represents the difference between the rate charged and what would have been reasonable without hidden commission incentives.

Statutory interest of 8% applies to successful claims, calculated from payment date to settlement date. This additional compensation recognizes that claimants lost access to funds that were wrongfully charged. For long-term agreements, statutory interest significantly increases the overall compensation.

Consequential losses apply in specific situations where mis-sold agreements caused additional financial impacts. These might include costs associated with financial difficulties created by unsustainable payments, fees for alternative finance arrangements, or other quantifiable losses directly attributable to the mis-sold agreement. While harder to claim, these losses represent legitimate compensation when properly evidenced.

Why You Should Act Now to File Your Claim

Legal time limits restrict when claims can be filed – generally six years from the agreement date or three years from discovering potential mis-selling. Delaying action risks exceeding these limitations, potentially invalidating otherwise legitimate claims regardless of merit.

Regulatory frameworks continue evolving, with financial authorities implementing new guidelines for addressing mis-sold finance claims. Acting now ensures your claim proceeds under current regulations rather than facing uncertainty from future changes. Industry experts recommend securing your place in the claims process while established precedents remain in effect.

Documentation availability decreases over time. Many consumers report difficulty locating paperwork for older agreements. Finance providers face similar challenges retrieving archived records beyond certain time periods. Filing while documentation remains accessible increases your chances of success by ensuring evidence remains available for assessment.

Can I Claim on Older PCP or HP Agreements?

Claims remain possible for older agreements, though specific considerations apply. The standard limitation period allows claims within six years of signing or three years from discovering potential mis-selling. Since widespread awareness of commission issues emerged recently, many older agreements still qualify despite exceeding the six-year window.

Documentation requirements increase for older agreements. Finance providers and claims assessors need comprehensive evidence of agreement terms and payment histories. Locating complete paperwork presents challenges for agreements predating digital record-keeping. When original documentation isn't available, bank statements showing payment patterns may support the claims process.

Success rates vary for older agreements based on documentation quality, specific agreement terms, and regulations applicable when the agreement was signed. Claims specialists report successful outcomes for agreements dating back to 2007, though case-specific assessment remains essential for determining eligibility and likelihood of success.

Is MotoNovo the Only Car Finance Provider Affected?

The issues with car finance agreements extend beyond MotoNovo to most major providers in the UK market. Similar claims processes exist for finance provided by numerous banks and specialized auto finance companies. The Financial Conduct Authority's investigation revealed industry-wide practices rather than isolated incidents.

Regulatory findings show discretionary commission arrangements were standard practice across the sector. Hidden commissions were commonplace between dealerships and finance providers. The scale of potential claims spans millions of agreements across dozens of providers, representing one of the largest consumer finance issues since the payment protection insurance (PPI) scandal.

Claim processes and eligibility criteria remain largely consistent across providers, with similar documentation requirements regardless of the specific finance company involved. This standardization simplifies matters for consumers with multiple finance agreements from different providers, allowing concurrent claims using similar evidence.

What to Expect After Filing Your Claim

Expect an acknowledgment within 14 days confirming receipt and outlining next steps. Initial assessment involves verification of eligibility and documentation review, with potential requests for additional information regarding specific aspects of the agreement.

The review process typically takes 8-12 weeks, though complex cases or high claim volumes may extend this timeline. During this period, MotoNovo examines agreement details, commission structures, and applicable regulations to determine whether the claim meets compensation criteria. Regular updates should provide transparency regarding progress.

Outcome options include acceptance with compensation offers, partial acceptance with reduced compensation, or rejection with explanations. For accepted claims, compensation typically arrives within 28 days of acceptance via direct bank transfer. Rejected or inadequate offers can be appealed through internal review processes or escalated to the Financial Ombudsman Service, though this extends the timeline by several months.

Common Pitfalls in Car Finance Claims and How to Avoid Them

Insufficient documentation frequently undermines otherwise valid claims. Maintain comprehensive records including the original agreement, all correspondence, payment histories, and verbal assurances received during the sales process. Where documentation is incomplete, request copies from finance providers under data protection regulations before starting your claim.

Missed deadlines represent another significant pitfall, with strict time limitations applying to both initial claims and appeals. Mark all relevant dates including submission deadlines, response windows, and appeal periods. Claims specialists typically incorporate deadline management into their services, providing reminders and ensuring timely submissions.

Settlement offers require careful evaluation rather than automatic acceptance. Early offers may undervalue legitimate claims, particularly when excluding statutory interest or failing to account for consequential losses. Consider seeking independent assessment of offer adequacy before accepting, especially for substantial agreements where compensation differences could be significant.