Car Finance Claims: Who Is Covered and How They Work

What is a car finance claim?

A car finance claim is made against the lender that financed your agreement, not the dealer that sold the car, and the FCA's redress scheme sets what it pays. Car finance compensation, a car finance refund and redress all mean the same payment here: redress is the FCA's word for it.

Three decisions created the claim. The Court of Appeal ruled on 25 October 2024 that brokers could not take commission without the customer's informed consent. The Supreme Court partly reversed that ruling on 1 August 2025: dealers owed no fiduciary duty, but Mr Johnson's relationship with his lender was unfair under section 140A of the Consumer Credit Act 1974. The FCA then published its final rules, PS26/3, on 30 March 2026, in force from 31 March 2026.

The FCA car finance redress scheme sets out those rules in full. Under them, every claim turns on one question: was the commission arrangement properly disclosed?

Was my car finance mis-sold?

Mis-sold car finance, in the FCA scheme's terms, is finance where the lender paid the dealer commission through one of three arrangements you were not properly told about. Car finance mis-selling therefore turns on these three arrangements:

• a discretionary commission arrangement (DCA), which let the dealer set your interest rate and earn more commission for a higher rate, banned from 28 January 2021;
• high commission, at least 39% of the total charge for credit and 10% of the amount borrowed;
• a tie, which gave one lender exclusivity or the first chance to offer you finance.

The scheme presumes the relationship was unfair where an arrangement was not properly disclosed, and the lender can try to show otherwise (CONRED 5.3). The Supreme Court held that non-disclosure alone does not always make a relationship unfair, which is why the scheme tests the arrangement itself. Commission of £150 or less (£120 before 1 April 2014) and a 0% APR never count (CONRED 5.2.19R).

Mis-sold car finance is real in that legal sense: the Supreme Court found Mr Johnson's relationship unfair and ordered his commission repaid with interest. Discretionary commission arrangements in car finance explains each arrangement and its exceptions. The tests apply to the agreement; the next question is whether you, as the borrower, are covered.

Who can claim on car finance?

You can claim on PCP, hire purchase or conditional sale finance for a motor vehicle taken out between 6 April 2007 and 1 November 2024, where the lender paid the dealer commission. You must also have lived in the UK when the agreement started. Sole traders, partnerships of 2 or 3 people and unincorporated bodies count as consumers; companies and LLPs do not (CONRED 5.1.1R). The five-question car finance claim checker tests one agreement against these scope rules from your own paperwork.

Your situation today changes who receives the money more often than whether a claim exists:

For everyone the table says yes to, the next question is what the claim pays.

What does a car finance claim pay back?

Car finance compensation is usually the average of two figures, your commission plus interest and the extra interest you paid, cut to the lowest of three caps. The FCA's rules give three possible outcomes:

• Commission repayment: all the commission plus interest, with no caps. It applies where commission was at least 50% of the total charge for credit and 22.5% of the amount borrowed, with a DCA or a tie. The FCA expects about 90,000 people to get this remedy.
• The hybrid remedy: half the commission leg plus half the overcharge leg, worked out against an APR 17% lower (21% lower before 1 April 2014), then capped. The FCA says about 1 in 3 results are capped.
• Nothing: a hybrid case with an APR at or below the lowest 5% of APRs for its year gets £0, which removes about 64,000 agreements (PS26/3).

The FCA's average is £829 per agreement across the 12.1 million agreements it expects to be eligible, 37% of those made in the period. Some agreements get more, some less and some nothing, so the average is not a personal figure. Your commission, APR, amount borrowed and dates decide your result, and how much compensation for mis-sold car finance explains the average and its spread. That money moves only once your lender has decided the claim.

How do car finance claims work?

A car finance claim runs through your lender: you complain or the lender writes to you, the lender decides under the FCA's rules, and you have 1 month to accept or challenge its decision. The scheme sets six steps:

1. 1
   You complain to the lender that funded the agreement, or reply within 6 months to a lender letter inviting you into the scheme.
2. 2
   The lender checks its records for the commission, the arrangement and your payments.
3. 3
   The lender sends a decision: an offer, or a letter saying you are not owed compensation.
4. 4
   You accept or challenge the decision within 1 month.
5. 5
   The lender pays within 1 month of your acceptance, adding 8% a year simple interest if it pays late.
6. 6
   The Financial Ombudsman Service reviews a disputed decision for free within 6 months, checking only whether the lender followed the scheme rules.

No scheme payments have started yet. The Upper Tribunal partly suspended the scheme on 1 July 2026, so lenders do not have to calculate or pay compensation until the legal challenges end.

Lenders must still send "not owed" letters by 18 November 2026 for complaints made by 30 June 2026 on agreements from 1 April 2014. The same letters are due by 18 January 2027 for older agreements, where the complaint was made by 31 August 2026. The FCA expects payments to begin in 2027, only if the scheme is upheld and the judgment is not appealed, and the car finance claims update tracks each date.

Complaining costs nothing, and how to claim mis-sold car finance yourself, for free walks through each step with the FCA's template letter. A claims company or law firm can make the complaint for a fee of up to 36% of your compensation, including VAT, the FCA says. Car finance solicitors and claims companies sets out their fees and the caps on them. The FCA issued 8 alerts about unauthorised firms in June 2026 alone, so check any firm on the FCA Register before you sign with it (FCA, 16 July 2026).

How do claims work in Scotland and Northern Ireland?

Car finance claims work the same way in Scotland and Northern Ireland, because the FCA scheme covers borrowers who lived anywhere in the UK when they took out the finance. The dates, the three arrangements and the remedies do not change. The one difference is the out-of-time test, which uses the law of the part of the UK the agreement is connected to (CONRED 5.1.24R):

• England and Wales: 6 years from the end of the credit relationship, starting later where the commission was concealed.
• Northern Ireland: 6 years from the end of the agreement, under the Limitation (Northern Ireland) Order 1989.
• Scotland: the Prescription and Limitation (Scotland) Act 1973 sets no prescription period for these unfair relationship claims (CONRED 5.1.23G), though the FCA does not treat the right to claim as open-ended.

In England, Wales and Northern Ireland, the FCA expects the main out-of-time group to be high-commission-only cases that ended before 26 March 2020 with the commission clearly disclosed (PS26/3). Every other difference between claims comes from the finance type or the claimant's situation, and each has its own page.

Car finance claims by finance type and situation

Each page below applies the same FCA rules to one finance type, vehicle or situation, with the free complaint route beside the estimate.

By finance type and vehicle:

• PCP claims: personal contract purchase deals, including a balloon payment, a car handed back and a deal settled early.
• HP finance claim: hire purchase and conditional sale agreements.
• Van finance claim: vans and campervans, including sole traders and small partnerships.
• Motorbike finance claim: motorbikes on PCP or HP, and the lender behind each bike finance name.

By situation, lender or check:

• Car finance claim: deceased relative: what the lender needs from the estate or a beneficiary.
• Car finance claims by lender: the eight lenders with their own pages, from Black Horse to Moneybarn.
• Car finance claim checker: five yes-or-no questions and four places to find a lost agreement.

You can complain to your lender or use the FCA scheme for free. Car Finance Claim Calculator gives free estimates under the FCA's published rules and is not a claims company.

Last checked 13 October 2026 against the FCA Handbook (CONRED 5 and 6), PS26/3 and the FCA's statements of 30 March and 2 July 2026. Written by Tirion Oman. Spotted a mistake? Tell us through the contact page.

Sources: FCA, car finance claims · FCA, scheme confirmed, 30 March 2026 · FCA, scheme partially suspended, 2 July 2026 · PS26/3 · Supreme Court judgment, 1 August 2025