Is Lookers Involved in the FCA’s Car Finance Mis-selling Investigation?
Lookers, one of the UK's largest automotive retail groups with over 150 franchised dealerships across the country, is a significant player in the car finance industry. The Financial Conduct Authority (FCA) has been investigating discretionary commission arrangements (DCAs) used by car dealers like Lookers from 6 April 2007 to 1 November 2024. This period saw an estimated 14 million agreements worth £8.2 billion in total, according to the FCA.
Who is Lookers?
Lookers operates across various regions and stocks a wide range of popular brands such as Ford, Volkswagen, Audi, BMW, Mercedes-Benz, Kia, Nissan, Toyota, Honda, Hyundai, Skoda, SEAT, Peugeot, Vauxhall, Land Rover, and Volvo. As an automotive retail group, Lookers not only sells new and used cars but also arranges finance agreements for customers through partnerships with multiple lenders.
How Does Car Finance Work at Lookers?
When a customer buys a car from Lookers, the dealership can offer PCP (Personal Contract Purchase) or HP (Hire Purchase) financing options. These are arranged by Lookers on behalf of a lending institution like [Black Horse](https://mlj.org.uk/lenders/black-horse), Close Brothers, MotoNovo, [Santander Consumer Finance](https://mlj.org.uk/lenders/santander-consumer-finance), and others. In exchange for facilitating these agreements, Lookers receives a commission from the lender.
What is the FCA Investigation About?
The FCA's investigation focuses on discretionary commission arrangements (DCAs) that car dealerships such as Lookers used to generate income. Under this arrangement, lenders would pay dealers an additional commission based on certain criteria, which could incentivise them to recommend finance options that might not be in the customer’s best interest. The FCA has estimated that around 14 million agreements were affected by these practices during the investigation period.
How Can I Tell If My Lookers Finance Agreement is Affected?
To determine if your car finance agreement with Lookers is part of this investigation, you should review your paperwork carefully. Check for details such as the lender's name, the interest rate applied to your agreement, and the dates when your contract was signed. These details will help identify whether your arrangement falls within the FCA’s scope.
How Can I Complain About My Finance Agreement?
If you believe your finance agreement with Lookers is affected by the FCA investigation, it's important to take action promptly. First, identify the lender who provided the finance based on your paperwork. Then, contact them directly to lodge a complaint for free-there’s no need to use a claims management company.
Once you’ve submitted your complaint, wait for a response from the lender within eight weeks. If you’re not satisfied with their resolution or if they do not respond within this timeframe, you can escalate the matter to the Financial Ombudsman Service (FOS). The FOS will review your case and make an impartial decision.
Sources and References
- Financial Conduct Authority (FCA) estimates: "14 million agreements" and "£8.2 billion total"
- Lookers website: https://www.lookers.co.uk
- Common lenders used by dealers: Black Horse, Close Brothers, MotoNovo, Santander Consumer Finance