Can I Claim Mis-sold Finance If My Car Was for Business?
If you used your car for work or business, you may be unsure if you can complain about the finance agreement you have for the vehicle.
As this is a very common question that people ask, this blog post by Mis-Sold Expert aims to provide all the information you need to help you understand your position.
The short answer is, it depends on how the agreement was set up and who the borrower was. Business use does not automatically prevent you from raising a complaint. But the details matter.
Was the Agreement in Your Personal Name or a Business Name?
Let's look at the finance agreement itself. If the agreement was in your name, even if you used the car for work, it may still be regulated as a consumer credit agreement. Many sole traders and self-employed individuals took out PCP or HP agreements in their personal name and then used the vehicle partly or fully for business.
If that sounds like your situation, you may still be eligible for a complaint.
If your agreement was in the name of a limited company or LLP, it is more likely to be treated as a business agreement, and in those cases, the protections available under consumer credit rules will not apply in the same way.
What Counts as Business Use?
Using your car for work does not automatically make the finance agreement a business contract.
For example, you might:
- Be self-employed and use the car to visit clients
- Use the car for commuting and occasional business travel
- Claim mileage through your company
That does not necessarily change the regulatory status of the agreement.
Lenders look at how the agreement was structured at the point of sale. If it was presented and documented as a personal consumer agreement, it may fall within Financial Conduct Authority regulation.
On the other hand, if the finance was clearly arranged as business lending, different rules can apply.
What About Sole Traders?
If you are a sole trader, things can feel blurred. Legally, you and your business are the same person. That means many sole traders entered into car finance agreements as individuals.
In some cases, agreements signed by sole traders are still regulated under the Consumer Credit Act, particularly if the amount financed was within the relevant thresholds at the time and the agreement was not clearly exempt.
If you were a sole trader and the agreement was in your personal name, it is worth checking further rather than assuming you are excluded.
Can Limited Companies Complain?
If the car finance agreement was taken out in the name of a limited company, the position is slightly different.
Limited companies and businesses are separate legal entities. Many business lending agreements fall outside the scope of standard consumer protections and remain completely separate to consumer credit agreements.
However, some small businesses may still be eligible to complain to the Financial Ombudsman if they meet certain criteria relating to turnover and employee numbers. The exact position depends on the size and structure of the business.
If you are unsure, you can ask the lender whether the agreement is considered regulated and whether Ombudsman referral rights apply.
What If Commission Was Involved?
Many current car finance complaints relate to commission arrangements between lenders and dealers.
If you were not told clearly that commission could influence the interest rate, and the agreement was regulated, that may form part of a complaint.
The key questions remain the same, whether the car was used for work or not:
- Was the agreement regulated?
- Were important features explained clearly?
- Was the interest rate affected by commission?
- Was the finance affordable at the time?
Business use alone does not answer those questions.
Does Tax Treatment Affect a Claim?
You may have claimed the vehicle as a business expense or offset interest against tax. That does not automatically prevent you from raising a complaint.
However, if redress is paid, there may be tax implications depending on how the vehicle and interest were treated in your accounts. If you are unsure, you should seek independent tax advice.
The existence of tax claims does not, by itself, remove your right to question how the finance was arranged.
How to Check Your Position
If you are not sure whether your agreement qualifies, take a practical approach.
Check:
- The name on the agreement
- Whether the document refers to regulated consumer credit
- The size and structure of your business at the time
- The date the agreement started
If the agreement began after April 2007 and was in your personal name, it may fall within FCA regulation. That means you can complain directly to the lender and, if necessary, refer the matter to the Financial Ombudsman Service.
If it was clearly structured as business lending to a limited company, your options may be more limited.
Can You Complain Yourself?
Yes. You can raise a complaint directly with the lender for free. You do not have to use a claims management company.
Some people prefer assistance where the agreement is complex or documents are missing. Others choose to handle it themselves. The process starts in the same place: writing to the lender and explaining why you believe the agreement may have been unfair.
A Simple Way to Think About It
Ask yourself one question. When you signed the agreement, were you treated as a consumer or as a business borrower?
If you were presented with a standard PCP or HP agreement in your own name, the fact you used the car for work does not automatically remove your rights.
If the agreement was clearly business finance in a company name, different rules are likely to apply.
Understanding that distinction is the first step.
Mis-Sold Expert can help you review your agreement and clarify whether it may fall within the scope of a regulated car finance complaint.
You can claim without using a claims management company; you can go to your finance provider and then to FOS, for free. Additionally, the FCA is introducing a free consumer redress scheme.
