Can I claim for mis-sold car finance taken out through my business?
If your car finance was taken out through a limited company or LLP, it will not normally be covered by the FCA’s motor finance redress scheme.
Sole traders and some small partnerships may still be eligible, including some business agreements where the amount of credit was £25,000 or less.
If you would like support understanding whether your agreement may qualify, Claim-Smart can help.
If you bought a car or van for work, it is easy to assume that means you cannot make a mis-sold car finance claim. But it really depends on how your business was set up and whose name was actually on the finance agreement.
Someone working as a sole trader is treated very differently to someone whose vehicle was financed by their limited company. The amount borrowed can matter too.
Here, we explain when business car finance can fall within the FCA’s redress scheme, what happens with sole traders and partnerships, and what to check if you are not sure how your agreement was set up.
Can I claim if the car finance was taken out through my business?
It depends on what you mean by “through my business”. If the borrower named on the finance agreement was a limited company or LLP, the agreement will generally fall outside the FCA’s motor finance redress scheme.
However, if you were self-employed and took the finance out as a sole trader, you may still be covered. So, before ruling yourself out, the first thing to check is exactly who entered into the finance agreement.
Can sole traders make a mis-sold car finance claim?
Yes, potentially. Being self-employed does not automatically exclude you from the FCA’s redress scheme.
A sole trader is legally different from a limited company. You are still entering into the agreement as an individual, even where the vehicle is being used as part of your work.
Business-purpose finance can potentially fall within the scheme where the amount of credit was £25,000 or less, provided the agreement meets the other eligibility rules.
This is because under the Regulated Activities Order (RAO), loans exceeding £25,000 for business purposes are generally exempt from regulation, but smaller amounts stay regulated.
This means someone who financed a van as a self-employed plumber, electrician, builder or delivery driver should not automatically assume they cannot claim just because the vehicle was used for work.
If you are unsure whether your agreement meets the criteria, our guide on whether you are entitled to a PCP claim explains the main rules.
Can a partnership make a car finance claim?
Some partnerships can potentially be covered too. The FCA’s scheme includes partnerships made up of two or three people, provided they are not made up entirely of corporate bodies.
Larger partnerships and LLPs are outside the scheme.
This makes it important to look at the exact legal structure rather than just whether you referred to yourself as a “business” at the time. A husband-and-wife partnership running a small business, for example, may be in a very different position to an LLP that owned and finances a big company fleet.
Can a limited company make a PCP claim?
Not through the FCA’s current motor finance redress scheme.
If the agreement was entered into by a limited company, rather than by you personally, it falls outside the definition of a consumer used by the scheme. The same applies to limited liability partnerships.
This can sometimes cause confusion where someone owns a small company and is the only director. Even if you personally drove the vehicle every day, the key question is who actually borrowed the money.
If your limited company is named as the customer on the finance agreement, that is different from you personally entering into the agreement as a sole trader.
How do I know whether the finance was personal or business finance?
The easiest place to start is your original finance agreement. If it shows your own personal name, possibly alongside a trading name, you may have entered into the agreement as an individual or sole trader.
If the borrower is listed as something like ABC Plumbing Ltd, then the agreement was taken out by the limited company.
You can also check old emails, bank statements and direct debit records if you no longer have the agreement.
Our guide on where to find the details needed to start a PCP car finance claim explains where else you can look.
What if I used the vehicle for both work and personal driving?
Using a vehicle for work does not automatically make the agreement ineligible.
Again, what matters is how the finance agreement itself was structured.
For example, a self-employed person may have financed a car in their own name and used it for visiting customers during the week as well as driving it personally at weekends. That is very different from a limited company entering into a finance agreement for one of its company cars.
Rather than trying to judge eligibility based purely on how often you used the vehicle for work, check who entered into the finance agreement and whether it was a regulated agreement covered by the FCA’s scheme.
Does the £25,000 limit apply to business car finance claims?
Yes, this is an important part of the rules. Where an agreement was for business purposes, finance above £25,000 falls outside the FCA’s current redress scheme.
That means a sole trader could potentially be included where the agreement was for £25,000 or less, but a similar business agreement above that amount would not be covered.
There are also separate rules affecting agreements entered into before 6 April 2008, when credit above £25,000 was outside the consumer credit regulation.
So, if your agreement was close to this figure, it is worth checking the actual amount of credit rather than relying on the price of the vehicle.
What if I personally guaranteed finance taken out by my limited company?
A personal guarantee does not necessarily turn a company finance agreement into a personal finance agreement.
The important question is who entered into the original motor finance agreement.
If your limited company was the borrower, the fact that you personally guaranteed it does not automatically bring that agreement within the FCA’s consumer redress scheme.
If you aren’t sure how your agreement was structured, it is worth checking the paperwork carefully rather than assuming a personal guarantee makes you eligible.
Who do I complain to about business-related car finance?
If your agreement falls within the FCA’s scheme, your complaint should normally go to the lender that provided the finance.
That is generally the company you made your monthly repayments to rather than the dealership that sold you the vehicle.
If you are unsure who financed the vehicle, our guide on which lenders you can make a mis-sold car finance claim against can help.
You can complain directly to the lender for free. Alternatively, if you would like some extra support checking whether your business agreement may qualify, get in touch with Claim-Smart to help.
What if my business finance is not covered by the FCA scheme?
Being outside the redress scheme does not necessarily mean that every complaint about the finance disappears.
It just means that you can’t receive compensation through this particular FCA motor finance scheme.
Whether you have any other route will depend on what happened, the type of agreement you entered into and the legal status of the borrower.
If your agreement was taken out by a limited company, LLP or another business that is outside the scheme, you may want to ask for independent advice about whether any other complaint or legal route is available.
Should sole traders submit a complaint now?
If you are a sole trader and think your agreement may fall within the scheme, it is still worth looking into it.
You can complain directly to your lender for free, or, if you would like support understanding whether your particular agreement may qualify, Claim-Smart can help.
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