Can I claim?
Who is eligible to reclaim mis-sold car finance?
Individuals who entered into a car finance agreement between April 2007 and November 2024 may be eligible, depending on the circumstances in which the agreement was sold, including how commissions, interest rates, and key terms were disclosed.
Does the finance agreement have to be paid off, or can I still claim if the loan is still ongoing and active?
The status of a loan — whether it’s been fully paid off or is still being paid — does not automatically prevent a claim. Eligibility depends on how the agreement was sold and the information provided at the time.
Can I claim if I bought a used car using finance?
Yes. Both new and used vehicles can be mis-sold — it all comes down to how the finance agreement was handled, not the age or condition of the car.
Can I claim if I bought a car and used a personal loan instead of a car finance loan?
No. If you bought a car using a personal loan instead of a car finance loan like PCP or HP, you can’t have been mis-sold. This is because personal loans are not secured against the vehicle and fall under different financial regulations. Mis-selling claims typically relate to the specific terms and conditions of car finance agreements, including how interest rates and commissions are presented and applied.
How far back can I make a car finance claim?
Claims generally relate to agreements entered into between April 2007 and November 2024. Time limits can depend on when the customer became aware of a potential issue.
Can I claim for mis-sold car finance even if the lender has gone out of business?
Yes. If your lender has stopped trading, you can still claim against the dealer or broker who arranged your agreement. Reach out to our car finance claim experts, and we’ll guide you through starting your mis sold car finance refund.
Mis-selling and commission
What types of mis-selling can I make a Car Finance claim for?
You might be eligible for a car finance claim if:
- Brokers or lenders used Discretionary Commission Arrangements (DCA on car finance) to inflate your interest rates for higher commissions.
- You were charged more than necessary due to inflated interest rates.
How do I know if I was mis-sold car finance?
You might have a mis sold car finance agreement if:
- Your interest rate was higher than necessary.
- The dealer or broker earned a commission they didn’t disclose to you.
- The terms of your agreement were unclear or misleading.
What is a Discretionary Commission Arrangement?
A Discretionary Commission Arrangement is when the amount of commission a car dealer or broker receives directly links to the interest rate of the car finance agreement they sell. In other words, the higher the interest rate they convince the customer to agree to, the higher their commission. This practice was banned by the FCA on 28 January 2021 to prevent financial incentives from influencing the cost of loans for consumers. It is one of the three things the FCA’s redress scheme covers.
How do we know car finance mis-selling has been taking place in car dealerships across the UK?
An investigation held by the Financial Conduct Authority (FCA) has provided concrete data and regulatory insights that substantiate PCP mis-selling in UK car dealerships. Evidence includes:
- Of 122 car retailers surveyed, only 11 informed their customers that the dealership may receive a commission for arranging the finance deal — pointing to a widespread lack of transparency in the industry.
- Only 31% of brokers explained that their customers would not own the car until all payments, including any balloon payments, are completed. This omission leaves many consumers unaware of the fundamental terms of their agreements.
- Only 28% of brokers disclosed the total amount their customer would ultimately pay under the finance agreement, as well as detailing the consequences of missed payments or early withdrawal from the agreement. Pretty critical stuff if you’re looking to make an informed financial decision.
- And perhaps the most telling stat… On a typical motor finance agreement of £10,000, it was found that customers could be charged up to £1,600 more in interest through a car finance arrangement compared to other financing plans.
Jonathan Davidson, the FCA’s Director of Supervision for Retail and Authorisations, described these findings as unacceptable, highlighting that “some motor dealers are overcharging unsuspecting customers over £1,000 in interest charges to obtain bigger commission payouts for themselves.”
The FCA’s response to these findings was decisive. It banned commission linked to the interest rate on car finance from 28 January 2021, a move projected to save consumers around £165 million a year. This regulatory change marks a significant step towards rectifying mis-selling practices in the car finance sector, aiming to foster a fairer, more transparent market for consumers.
Making a claim
What is the process?
You can self-represent and approach the lender directly, go to the Financial Ombudsman Service (FOS), OR you can submit a claim with ourselves and our working partners and we’ll do all the legwork for you. Operating on a No-win-No-fee basis. This means it costs you nothing upfront to join. If your claim is successful, a pre-agreed percentage will be taken as a fee. If your claim is not successful, you won’t pay a penny. See fees.
What happens after I submit a claim?
After submitting a claim:
- You’ll receive an acknowledgment of your complaint from the finance provider.
- The provider will then investigate your claim, which may involve requesting further information from you.
- Within two months (or longer if your claim involves a discretionary commission arrangement), the provider typically offers a response. They will either acknowledge mis-selling and offer compensation, or reject the claim.
- If your claim is rejected or you’re dissatisfied with the response, you can escalate your complaint to the Financial Ombudsman Service.
Which lenders can I make a mis-sold finance claim against?
Our claim experts assist customers with claims involving major lenders, including Black Horse Ltd, Volkswagen Financial Services (UK) Ltd, FirstRand Bank Ltd (London Branch), BMW Financial Services (GB) Ltd, Santander Consumer (UK) PLC, RCI Financial Services Ltd, Vauxhall Finance PLC, Close Brothers Ltd, PSA Finance UK Ltd, FCE Bank PLC, Mercedes-Benz Financial Services UK Ltd, CA Auto Finance UK Ltd, Clydesdale Financial Services Ltd, Blue Motor Finance Ltd, NIIB Group Ltd, Toyota Financial Services (UK) PLC, Moneybarn No. 1 Ltd, Hyundai Capital UK Ltd, Startline Motor Finance Ltd, and many more.
If your agreement was with one of these lenders or others not listed, you may still be eligible for compensation. Our claim services can help you get started. See every lender we cover.
Which car makers can I make a mis-sold Car Finance Claim against?
Most claims are sent to banks or lenders associated with car manufacturers, rather than the car makers themselves.
The FCA scheme
When will I be paid?
Payouts under the FCA’s scheme are on hold while three lenders and a consumer group challenge its rules. The full hearing is from 16 February to 3 March 2027. Payments only start if the scheme is upheld and that decision isn’t appealed. See where the FCA scheme stands.
My lender has written to me. What now?
While the scheme is paused, lenders don’t have to work out or pay compensation. They must still tell people who have already complained if they’re not owed anything:
- by 18 November 2026, for agreements from 1 April 2014 complained about by 30 June 2026
- by 18 January 2027, for older agreements complained about by 31 August 2026
Offers wait for the ruling. If you’re told you’re not owed and you disagree, you can ask the lender to look again, then go to the Financial Ombudsman.
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