Over 14 million car finance agreements were affected by issues related to discretionary commission arrangements between dealers and lenders from 6 April 2007 to 1 November 2024, according to the Financial Conduct Authority (FCA). This includes many consumers who purchased Audi vehicles through Pendragon or similar dealer groups on PCP or HP finance. While Pendragon may not currently stock Audi, many consumers have bought these vehicles from Pendragon in the past.
Audi Finance at Pendragon
When you buy an Audi vehicle through Pendragon, the dealership typically offers
Personal Contract Purchase (PCP) and
Hire Purchase (HP) financing options. Under a PCP agreement, you make monthly payments for a specified period and then have the option to return the car or pay a final balloon payment to own it outright. In contrast, HP involves making regular payments until the total cost of the vehicle is paid off.
A key aspect to understand here is the role of discretionary commission arrangements (DCAs). These are agreements between dealerships like Pendragon and lenders that allow the lender to provide additional funding or benefits to the dealer based on performance metrics. The FCA has found that some DCAs led to higher interest rates for consumers, resulting in an estimated £8.2 billion overcharged across these 14 million agreements.
Finding Your Lender
If you bought a Audi through Pendragon and are unsure who your lender is, you need to locate the finance agreement documentation provided at the time of purchase. This document should clearly state the name of the financial institution that funded your car loan. Common lenders include banks like Santander or RBS, as well as dedicated automotive finance companies such as Toyota Finance UK Limited.
You should identify the lender because Pendragon is merely the dealer; it does not provide financing directly. Therefore, any complaints regarding your car finance agreement should be directed towards the actual lending institution identified in your paperwork.
To address any concerns about overpayment due to discretionary commission arrangements, you can
complain directly to your lender without involving a
claims management company. The process is straightforward and free of charge. Simply contact your lender's customer service department via phone or email with detailed information about the issue.
You do not need a claims management company to handle this for you. They often charge upfront fees and take a significant portion of any compensation awarded, which can reduce the amount you receive significantly. Instead, follow the official complaint process outlined by your lender to ensure you get full resolution without additional costs.
Sources and references
- Financial Conduct Authority (FCA). "Mortgage and consumer credit: discretionary commission arrangements" [FCA estimate].
- FCA estimates on car finance agreements affected from 6 April 2007 to 1 November 2024.