About this guide
If you bought a car, van or motorbike on Personal Contract Purchase (PCP), you could be due back £1,000s.
In January 2021, the regulator, the Financial Conduct Authority (FCA), announced a blanket ban on ‘discretionary commission arrangements’ (DCAs). Up until that point, lenders allowed brokers and dealers to increase the interest rates so they could get more commission. This unfair practice affected about 90% of car finance deals. It was so exploitative because most consumers wrongly presumed it was a fixed price – they never thought to negotiate and ended up significantly overpaying.
In January 2024 the FCA launched a major investigation into hidden, unfair car finance commission.
On August 1st 2025, the High Court (later reinforced by the Supreme Court) issued a landmark judgement that partially overturned a previous Court of Appeal ruling. While this confirmed that many claims remain valid, it clarified that not all failures to disclose commission will automatically result in compensation, meaning claims now need to show that the commission made the agreement unfair.
Following these rulings, the FCA has now finalised a nationwide compensation scheme.
The latest update confirms:
- Around 12.1 million agreements are expected to be eligible
- Average payouts are estimated at around £829 per agreement
- Total compensation is expected to reach approximately £7.5 billion
- Payouts are expected to begin from 2026 onwards
This marks a significant step forward for consumers who may have been overcharged, with millions now expected to receive compensation as the scheme rolls out.
How to claim?
Following the most recent rulings and FCA update, a formal redress scheme will now be rolled out.
There is still a lot that has yet to be finalised in detail, including how individual compensation amounts will be calculated and how firms will contact affected customers. This means that while car finance firms are being prepared to review complaints, there may still be delays before decisions are made.
This guide takes you through a simple complaint process. While some customers may be contacted automatically as part of the scheme, others may still need to submit a complaint to ensure their claim is considered. We are obliged to state clearly that the guidance we give here does not constitute legal advice. If you have any questions please reach out to us at support@resolver.co.uk.
Step 1: Find out whether you were affected
If you’ve ever had a car finance deal, it’s likely that you were affected by these unfair commission charges.
The FCA now expects that agreements made between 6 April 2007 and 1 November 2024 could fall within scope of the compensation scheme.
If yours included a commission arrangement that wasn’t properly disclosed, and it resulted in you paying more, you may be entitled to money back.
The FCA’s latest estimate suggests the average payout is around £829 per agreement, although this will vary depending on your individual case.
You may have been affected if you bought a motor vehicle – including cars, vans, camper vans and motorbikes – on finance and…
- you still have an agreement in place.
- your agreement ended at some point in the last six years.
- you had an agreement dating back to 2007 onwards.
Other factors to consider
A note on older agreements:
Agreements from April 2007 onwards are now expected to fall within scope of the FCA scheme.
If you had an older agreement, you should still proceed with your claim to avoid your complaint being excluded by any time limits.
Can I reclaim for a vehicle I used for work?
The rules stipulate that a vehicle had to be for primarily personal, not business, use. While commuting comes within personal use, using it more than occasionally for business, or paying the expenses through your business, will mean that you don’t qualify for compensation.
(Some vehicles that were financed through a business agreement could be included – but only if they’ve been used for primarily non-business reasons and financed through a regulated credit agreement for under £25,000. This cap only applies to business agreements – not personal finance agreements).
Can I reclaim on behalf of a deceased relative?
You can make a claim on behalf of someone who has passed away. However, the lender will probably need you to provide a copy of the will and/or grant of probate in order to ensure that any compensation gets paid out to the right person.
Does this include vehicles that have been paid off?
Yes – even if the loan has been paid off, and the agreement is over, you may still be eligible to reclaim.
Does it include Personal Contract Hire?
No. This is leasing a car and is not included in the FCA investigation. If you had this type of finance agreement, this guide isn’t for you.
What if I had interest-free finance?
No. If you had a 0% interest deal there could not have been any ‘discretionary commission arrangement’ between the lender and the broker.
Is it possible to have multiple claims?
Yes. If you had multiple eligible car finance deals, you may be due multiple payouts. Each case is individual. If you want to make a claim yourself – rather than using a third party – you will need to make a separate claim for each firm/finance provider you had an agreement with.
Step 2: Find out who to complain to
To claim yourself, you must make a complaint to the lender that provided the finance. In other words, the firm you paid each month – not the broker/car dealer who sold you the vehicle.
To find out who you should submit your complaint to you must check any loan agreement documentation you have and collect as much information as possible about your car finance agreements. You can then use the template provided on the next page.
What if I don’t know the details of my agreement?
If you can’t find the paperwork relating to your original agreement, you should check your credit report. If your agreement has been active in the past six years, it should be listed on there. You could also check any old bank statements if you have them.
Once you’ve found the firm’s name, even if you don’t know the finance agreement details, you should give them a call and request that they provide you with the full information.
Step 3: Submit a complaint
Copy and complete the template below to register your complaint.
Remember, for multiple claims you’ll have to submit one for each lender.
Letter template
Dear [name of finance provider],
I’m getting in touch to make a complaint about a previous agreement I had with you.
While the FCA has not yet completed its investigation into PCP car finance, I would like you to log my complaint – as I believe I was unfairly charged and may be due compensation.
Please find my details and information relating to the policy below:
- My full name:
- DOB:
- Current address:
- Address at the time of agreement:
- Vehicle registration:
- Date of agreement:
- Finance agreement policy number (These should be on all agreement letters or paperwork you have):
As well as logging this as a formal complaint, I request that you reply with written confirmation of receipt.
Kind regards,
[Your name]
Step 4: Wait for a response
You should receive an acknowledgement of receipt within one month.
If you haven’t:
- Check your sent box
- Check your junk mail
- Check the address you sent it to
If you have done these and still have no response from the firm you should chase them up.
We recommend that you give the car finance provider a month to respond. However, due to the scale of the compensation scheme, many firms may take longer.
It’s important to get your complaint in and make sure that it’s been acknowledged within the required time periods.
Once the FCA scheme is live, firms are expected to begin issuing decisions and payments throughout 2026.
Had a response, what next?
If you are told: ‘Please provide further information’ this is a good sign.
If you are told: ‘We’ve logged your complaint’ you are potentially in line for a payout once the FCA scheme processes your case.
If you are told: ‘No. You didn’t have a commission arrangement on your contract’ then you may not be eligible.
If you are told: ‘Your complaint is rejected’ you can still go to the Financial Ombudsman.
If you are told: ‘We can’t find your info’, the firm must still make reasonable efforts, but providing more details will help.
How much compensation can I expect to receive?
The FCA has now provided clearer guidance on compensation.
- Average payout: around £829 per agreement
- Total scheme: approximately £7.5 billion
- Around 12.1 million agreements expected to be included
Compensation will depend on:
- The level of commission
- Whether it was disclosed
- Whether it made the agreement unfair
In many cases, compensation is expected to reflect the difference between what you paid and what you should have paid without the commission.
The bigger the financing agreement, the more you may be due back.