The Volkswagen California, a popular van model known for its versatility as both a commercial vehicle and a leisure RV, was commonly sold on
Personal Contract Purchase (PCP) and
Hire Purchase (HP) finance agreements during the Financial Conduct Authority's (FCA) investigation period from 6 April 2007 to 1 November 2024. This investigation uncovered significant issues in
discretionary commission arrangements that led to potential mis-selling of motor finance products, affecting millions of consumers.
How the Volkswagen California was Typically Financed
The Volkswagen California was often financed through Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements with typical finance amounts ranging from £20,000 to £45,000. Common lenders for Volkswagen vehicles include
Black Horse,
Lombard,
Close Brothers Motor Finance, and Hitachi Capital Vehicle Solutions. These arrangements typically spanned 36 to 60 months, allowing customers to make monthly payments with the option of a final balloon payment at the end of the term.
In PCP agreements, consumers would pay for the depreciation of the vehicle over the contract period, with a guaranteed future value (GFV) set at the start. This GFV, also known as a balloon payment, was intended to be an estimate of what the vehicle might be worth at the end of the agreement if it were sold or traded in. However, during the FCA investigation, it emerged that some lenders were offering discretionary commissions to dealers based on these balloon payments, which could have influenced how GFVs were set and potentially led to mis-selling.
The FCA Motor Finance Investigation
The FCA's investigation into motor finance revealed significant issues with discretionary commission arrangements. Lenders who provided finance for Volkswagen Caliornias, among other vehicles, were found to be offering additional incentives to dealers based on the size of the balloon payments in PCP agreements. This practice could have led to higher GFVs being set artificially high, thereby increasing monthly payments and overall costs for consumers.
According to the FCA's findings, 12.1 million eligible agreements (FCA estimate) were affected by these practices between April 2007 and November 2024. The total estimated cost to consumers across all affected agreements was around £7.5 billion (FCA, March 2026), with an average mis-selling cost of £829 per agreement (FCA estimate). These findings highlight the widespread nature of potential mis-selling in the motor finance industry during this period.
How to Check Your Agreement Look for any mention of "discretionary commission" or "DCA," which stands for Discretionary Commission Arrangement. These agreements were typically in place between 6 April 2007 and 1 November 2024.
If you find evidence that your finance arrangement included a DCA, it is likely that you are eligible to make a complaint to the lender involved. Common lenders for Volkswagen vehicles include Black Horse, Lombard, Close Brothers Motor Finance, and Hitachi Capital Vehicle Solutions. You can review your agreement documents or contact the lender directly to seek clarification.
If you suspect that your Volkswagen California finance agreement was mis-sold under a DCA arrangement, you do not need to use the services of a
claims management company. Instead, you can complain directly to your lender at no cost. Common lenders such as Black Horse, Lombard, Close Brothers Motor Finance, and Hitachi Capital Vehicle Solutions offer free complaint procedures that allow you to seek redress without incurring additional fees.
When making a complaint, it is important to provide detailed documentation of your agreement, including any terms related to discretionary commissions or DCA arrangements. You can also refer to the FCA's guidance on motor finance complaints for further assistance. Remember, seeking help from a claims management company is not necessary and could result in additional charges.
Sources and References
- Financial Conduct Authority (FCA)
- Office of National Statistics (ONS) Census 2021
- Motor Finance Complaints Guidance (FOS)
Based on 8,915 MOT tests conducted in 2024 (source: DVSA anonymised test data), the Volkswagen California has a pass rate of 85.3%. This is above the national average of 79.6%, meaning the California performs well in MOT testing.
The California pass rate is better than the overall Volkswagen average of 80.1%. The average mileage at MOT for this model is 57,344 miles.
- MOT pass rate: 85.3%
- MOT failure rate: 14.7%
- Tests analysed: 8,915 (2024 DVSA data)
- Average mileage at test: 57,344 miles
- Volkswagen average pass rate: 80.1%
- National average pass rate: 79.6%
Data source: DVSA anonymised MOT test results 2024, published under the Open Government Licence v3.0.