The Volkswagen ID.5 was commonly sold on Personal Contract Purchase (PCP) and Hire Purchase (HP) finance agreements during the Financial Conduct Authority’s (FCA) investigation period, which ran from 6 April 2007 to 1 November 2024. The FCA's investigation into motor finance highlighted significant issues with discretionary commission arrangements, affecting millions of consumers across various car models and brands.
How the Volkswagen ID.5 was Typically Financed
The Volkswagen ID.5 is a popular electric vehicle that was frequently financed through PCP or HP agreements during its market presence from 2021 onwards. The typical finance amount for an ID.5 ranged between £15,000 and £30,000, with terms usually lasting 36 to 48 months. Common lenders providing finance options included Black Horse, Barclays Partner Finance, Close Brothers Motor Finance, MotoNovo Finance, and Santander Consumer Finance.
In a PCP agreement for the ID.5, consumers would make monthly payments for an agreed period, followed by a final balloon payment, or option to purchase the vehicle at the end of the term. This structure made it appealing to those who preferred lower monthly payments while maintaining the flexibility to return the car or buy it outright.
The FCA Motor Finance Investigation
The FCA launched an investigation into motor finance arrangements due to concerns about discretionary commission practices used by lenders and retailers. Discretionary commissions were a financial incentive given to dealerships for recommending certain finance products, leading to potential mis-selling and higher costs for consumers. As a result of this investigation, the FCA found that 12.1 million eligible agreements (FCA, March 2026) across various car models, including the Volkswagen ID.5, were affected (FCA estimate). The total estimated overpayment by consumers was £7.5 billion (FCA, March 2026), with an average excess payment of £829 per agreement (FCA estimate).
How to Check if Your Volkswagen ID.5 Finance Agreement is Affected
To determine whether your Volkswagen ID.5 finance agreement might have been affected, you should review the terms and conditions of your contract carefully. Look for any reference to discretionary commission arrangements or additional fees that seem unusual. If your agreement was made between 6 April 2007 and 1 November 2024, it falls under the scope of the FCA investigation.
Key indicators of a potentially affected finance deal include:
- The inclusion of terms like "discretionary commission" in your contract.
- A higher-than-expected APR or monthly payments for the ID.5.
- Evidence that you were steered towards particular lenders or products without clear justification.
If your agreement includes these elements, it is worth investigating further to understand if you are entitled to a refund based on mis-selling claims.
You do not need a claims management company to pursue your rights regarding a potentially affected Volkswagen ID.5 finance agreement. Common lenders such as Black Horse, Barclays Partner Finance, Close Brothers Motor Finance, MotoNovo Finance, and Santander Consumer Finance have established complaint procedures that you can use directly.
To begin the process, gather all relevant documentation about your finance agreement, including copies of contracts, payment records, and any correspondence with your lender. Submitting a formal complaint to your lender is a straightforward way to initiate the resolution process without incurring additional costs or fees. If your lender does not respond adequately or if you are unsatisfied with their decision, you can escalate the matter to the Financial Ombudsman Service (FOS) for further review.
Sources and References
- FCA estimate of affected agreements: 12.1 million (FCA, 2024)
- Total estimated overpayment by consumers: £7.5 billion (FCA, March 2026) (FCA, 2024)
- Average excess payment per agreement: £829 (FCA, 2024)