Pendragon, a prominent UK car dealer group, has been in the spotlight following an investigation by the Financial Conduct Authority (FCA). The FCA's probe into discretionary commission arrangements (DCAs), which cover 14 million agreements worth £8.2 billion between 6 April 2007 and 1 November 2024, highlights potential mis-selling issues in car finance.
Who is Pendragon?
Pendragon operates as one of the largest dealership networks in the UK, offering a wide range of brands including BMW, Ford, Vauxhall, Jaguar, Land Rover, Kia, Hyundai, Renault, Porsche, and Mercedes-Benz. The group's network includes premium outlets under the Stratstone brand and volume dealerships under Evans Halshaw. Pendragon operates Car Store used car supermarkets across the country.
How Pendragon Finance Agreements Work
When a customer purchases a vehicle from a Pendragon dealership, they may choose to finance their purchase through either
Personal Contract Purchase (PCP) or
Hire Purchase (HP). In these arrangements, Pendragon acts as an intermediary between the customer and the lender. The dealer arranges the finance agreement on behalf of lenders such as
Black Horse,
Close Brothers,
MotoNovo,
Santander Consumer Finance, among others. These lenders provide the necessary funding for car purchases while Pendragon receives commission for facilitating the transaction.
The FCA Investigation into Discretionary Commission Arrangements
The FCA's investigation into DCAs has uncovered potential issues with how car dealers, including Pendragon, arranged finance agreements for customers. The investigation covers a period from 6 April 2007 to 1 November 2024 and involves an estimated £8.2 billion in total car finance agreements. According to the FCA, these arrangements may have led to customers being charged higher interest rates than they should have been.
How to Check if Your Pendragon Finance Agreement is Affected
Customers who financed their vehicles through a Pendragon dealership during the relevant period can check whether their agreement was part of the investigation by reviewing their paperwork. Key details to look for include:
- Lender Name: Identify which lender provided your finance agreement.
- Interest Rate: Check if the interest rate appears unusually high or inconsistent with market rates at the time of purchase.
- Agreement Dates: Ensure that your car finance agreement falls within the period specified by the FCA investigation (6 April 2007 to 1 November 2024).
If you believe your Pendragon finance agreement may have been affected by mis-selling practices, it is important to
[complain directly](https://mlj.org.uk/guides/how-to-complain-to-your-lender) to your lender. You do not need a
claims management company; the process can be handled independently and at no cost.
- Identify Your Lender: Refer back to your finance agreement documents to find out which lender provided your car finance.
- Contact the Lender: Write or email your complaint directly to the lender, explaining the issues you have identified with your agreement.
- Provide Evidence: Include any relevant documentation such as loan agreements, interest rate comparisons, and correspondence with Pendragon.
If your lender does not respond satisfactorily within eight weeks, you can escalate your complaint to the Financial Ombudsman Service (FOS) for a free review of your case.
Sources and references
- FCA: "Discretionary Commission Arrangements in Car Finance," https://www.fca.org.uk/news/press-releases/fca-proposes-changes-to-car-finance-practices
- Pendragon Group plc, https://www.pendragon.co.uk