Complaints about car finance rise 64% with car insurance not far behind

Complaints about car finance rose by 64 per cent last year, with motor insurance up by 38 per cent, too, according to the Ombudsman

Van finance explained

Car finance deals and car insurance policies were among the highest complained about sectors for the Financial Ombudsman last year, according to new figures.  

Despite registering 237,576 fewer complaints overall in 2016 than the previous year, representing a 14 per cent decline, the Ombudsman saw a worrying 64 per cent rise in vehicle finance complaints. 

The number of people contacting the Ombudsman about a problem with their vehicle finance provider reached 5,029 in 2016, up from 3,072 in 2015. The Ombudsman attributed some of this growth to the rising number of cars bought on finance, which now accounts for nearly nine out of ten new cars in the Uk. The Ombudsman resolved a quarter of hire purchase complaints last year. 

• Bad credit finance: what is a subprime loan and should you consider one?

The Ombudsman said: “We saw more complaints about hire purchase agreements as a whole. And as sales of new cars continued to grow, we heard from people who’d taken out PCP agreements.”

However, a rise in new car sales may not be the only contributing factor, as earlier in the year, the Financial Conduct Authority said it will begin to investigate “irresponsible” lending practices in the vehicle finance sector. The watchdog said it was concerned about a lack of transparency in the market and people being pushed into deals they may not be able to afford.

Vehicle finance wasn’t the only sector seeing a surge in complaints. Problems relating to car insurance also grew by 38 per cent. Last year 11,844 people got in touch with the Ombudsman about their vehicle policy, up from 8,585 in 2015, making up nearly a third of all insurance complaints. 

Logbook loans, where motorists use their logbook as collateral for a loan, were another sector that saw a surge in complaints. Although the number of people complaining about their lender rose from 59 to 103 between 2015 and 2016, this represented a 75 per cent rise for the Ombudsman. 

Are you worried about the rising number of car finance and motor insurance complaints? Have you ever had cause to complain? Tell us in the comments below... 

Recommended

Four million people in the UK have fallen asleep while driving
Tired driver
News

Four million people in the UK have fallen asleep while driving

Research produces worrying revelation that four million UK motorists have nodded off behind the wheel at some point
16 Jun 2021
Thatcham approved devices and crash tests explained
Joe Finnerty in Hyper G sled
Consumer news

Thatcham approved devices and crash tests explained

Thatcham studies crashes, rates alarms and sets insurance groups to help cut drivers’ costs. We find out how
11 May 2021
Company car tax guide 2021/2022: everything you need to know
Executive saloons make popular company cars
Consumer news

Company car tax guide 2021/2022: everything you need to know

Company car tax is bound up in a complex net of emissions, salaries and a car's value; we explain how the system looks for the 2021/22 Financial Year
27 Apr 2021
No new smart motorways to open without stopped vehicle detection
smart motorway
News

No new smart motorways to open without stopped vehicle detection

Implementation of SVD technology to be accelerated, with existing smart motorways getting the system six months earlier than planned
21 Apr 2021

Most Popular

New 2021 Vauxhall Astra teased for the first time
Vauxhall Astra teaser 1
Vauxhall Astra

New 2021 Vauxhall Astra teased for the first time

The new Vauxhall Astra will get electrified powertrains and a more premium image
8 Jun 2021
New Vauxhall Astra prototype review
Vauxhall Astra prototype - front
Vauxhall Astra

New Vauxhall Astra prototype review

A new Vauxhall Astra is on the way and we've driven a prototype ahead of its official arrival
14 Jun 2021
‘Our switch to electric will soon make driving manual cars a lost art'
Gearknob
Opinion

‘Our switch to electric will soon make driving manual cars a lost art'

Want to drive a manual car? You need to take your test in a manual car. So what happens once all driving-school cars are automatic EVs?
8 Jun 2021
'The hydrogen underdog disruptor is back in town'
Toyota Mirai opinion
Opinion

'The hydrogen underdog disruptor is back in town'

Mike Rutherford says hydrogen-powered cars could still be a frequent sight on UK roads
13 Jun 2021
UN report highlights ethical problems with electric cars
Electric car charging
News

UN report highlights ethical problems with electric cars

Analysis reveals lithium refining takes 65 per cent of Chilean region’s water, while 40,000 child miners dig for cobalt in DRC
14 Jun 2021
New Porsche Macan facelift prototype review
Porsche Macan prototype - front
Porsche Macan

New Porsche Macan facelift prototype review

We get behind the wheel of a prototype version of the facelifted Porsche Macan SUV
13 Jun 2021
Illegal car modification hotspots revealed
Volkswagen Polo exhaust
News

Illegal car modification hotspots revealed

Gloucestershire has the highest proportion of illegal car modifications, with altered number plates the most common breach
14 Jun 2021
Ineos Grenadier prototype 2022 review
Ineos Grenadier prototype
Ineos Grenadier 4x4

Ineos Grenadier prototype 2022 review

Can the Ineos Grenadier really fill the mud-splattered void left by the old Land Rover Defender? We take a first drive in a prototype to find out...
15 Jun 2021
'Factories are at a standstill because they can’t get the parts to finish cars'
Car manufacturing
Opinion

'Factories are at a standstill because they can’t get the parts to finish cars'

Steve Fowler points out the fresh issues facing global car manufacturing
9 Jun 2021
New Nissan Qashqai production begins in Sunderland
Nissan Qashqai - front static
News

New Nissan Qashqai production begins in Sunderland

Nissan will offer every school child in the North East of England a place on the Nissan Skills Foundation course to mark 35 years of manufacturing in …
14 Jun 2021
Volkswagen Golf GTI Clubsport vs Cupra Leon 300
Volkswagen Golf GTI Clubsport vs Cupra Leon 300
Car group tests

Volkswagen Golf GTI Clubsport vs Cupra Leon 300

The capable Volkswagen Golf GTI Clubsport goes up against its new Cupra Leon 300 sibling in this hot hatch battle
12 Jun 2021
New hydrogen-powered Land Rover Defender prototype in development
Land Rover Defender
Land Rover Defender

New hydrogen-powered Land Rover Defender prototype in development

The Land Rover Defender FCEV prototype will be assessed for off-road and long-range zero-emission motoring
14 Jun 2021
SsangYong J100 to get tough in the electric SUV sector
SsangYong J100 electric SUV
SsangYong

SsangYong J100 to get tough in the electric SUV sector

The tough looking electric mid-size SUV is slated for production next year and will be joined by a pick-up model
15 Jun 2021
New 2021 Volkswagen T7 Multivan replaces Caravelle
Volkswagen T7 Multivan - front
Volkswagen Caravelle

New 2021 Volkswagen T7 Multivan replaces Caravelle

The Volkswagen T7 Multivan MPV switches to the MQB platform and adds plug-in hybrid technology
10 Jun 2021