Car Finance Claims: What’s the Background and Can You Claim?
Discover everything you need to know about car finance claims, one of the biggest consumer scandals the UK has ever seen. Learn whether or not you can make a car finance claim and how steps are being taken to compensate millions.
Last Updated: 13th April 2026
Am I Eligible? — How Long Does it Take? — Will Claiming Have Negative Effects?
Claiming Yourself vs Law Firm — Holding Lenders Accountable — Start Your Claim
Unfair commission models, excessive commission fees, and the absence of proper affordability assessments are stark examples of the tactics unethical lenders use to take advantage of those seeking to purchase a vehicle.
How can we prevent them from continuing these harmful actions and damaging consumers’ trust in the car finance industry? The solution lies in pursuing a claim against the finance providers. This guide covers everything you need to know about car finance claims, from how to find out if you’re eligible to a timeline of key milestones so far. This is a rapidly evolving situation, and details are changing frequently. Please check back regularly for updates.
Am I Eligible to Make a Car Finance Claim?
Most car finance claims involve agreements with discretionary commission arrangements (DCAs). Therefore, if you bought a car on PCP or HP finance between 1 April 2007 and 1 November 2024, and your agreement involved a DCA, you will likely be eligible. Following a recent Supreme Court hearing and a subsequent update from the Financial Conduct Authority (FCA), the likelihood of consumers receiving compensation due to discretionary commission has increased significantly.
The discretionary commission model meant that the customer paid an inflated interest rate, allowing the dealer to earn a higher commission. It has been deemed an unfair practice and has therefore been banned by the FCA since 2021.
The Supreme Court ruling means that any commission deemed excessive, not just DCAs, may also be due compensation.
How Long Does the Claims Process Take?
The FCA confirmed its anticipated mass redress scheme in March 2026. Under this scheme, millions of consumers will be compensated. There is a short implementation period to allow lenders to prepare. This period is up to 30 June 2026 for agreements taken out after 1 April 2014 and up to 31 August 2026 for those taken out earlier. People who have already submitted a complaint will receive compensation sooner, with lenders required to let them know whether they’re owed compensation and how much within 3 months from the end of the relevant implementation period. When an offer is presented, consumers will have 1 month to accept or challenge it. If an offer is accepted, lenders must deliver compensation within 1 month. Lenders are only required to contact customers who haven’t yet submitted a complaint if they are eligible for compensation. These consumers should be contacted within 6 months of the implementation period.
Claiming Yourself vs Using a Firm
You have two options when making a car finance claim and getting back the money you’re owed if you were mis-sold your agreement. You can complain directly to the lender yourself for free. If the complaint is rejected or you aren’t happy with the response, you can then escalate it to the Financial Ombudsman Service (FOS) for free. You should first complain to the lender before escalating the complaint to the FOS.
The FCA has announced a mass redress scheme, and under this scheme, you do not need to register a complaint to be eligible for or receive compensation. You also do not need to use a law firm or claims management company (CMC) to access the scheme.
If you decide to start the claim yourself, you won’t have any fees to pay and will keep 100% of your compensation. It means you can also manage the pace of the process and organise all correspondence. However, financial regulations and legal work can be complex. A small mistake in your paperwork could delay or jeopardise the claim. Claims can also be time-consuming and take more effort than it’s worth to gather supporting documents and communicate with the relevant organisations.
If you use a law firm or a claims management company, you can rest assured that they will have expertise in financial mis-selling cases, knowing how best to frame your complaint and what evidence is needed to present the best possible case. The firm’s team will handle many of the time-consuming tasks, such as collecting documents, drafting submissions, and communicating with your lender(s), freeing you to focus on your day-to-day life. Most reputable firms will work on a No Win, No Fee basis* Read more , meaning you will only pay if the claim is successful. Using a law firm or a CMC means that a pre-agreed percentage will be deducted from your compensation, and you may have less direct control over timelines and processes.
The decision of whether to claim yourself or use a firm is entirely up to you. You can use the information above to help you weigh up the pros and cons.
Will Making a Claim Have Any Negative Effects?
We understand that people often have doubts about whether to make a claim against financial mis-selling for various reasons, such as believing it would be a waste of time or worrying about potential negative consequences. Firstly, consumers might not think they have a case or lack awareness about how mis-selling has occurred. However, by going to a law firm or claims management company, you will receive comprehensive advice about your situation and how you have been affected. Similarly, many are worried about the costs involved. However, you won’t be charged a penny unless your case is successful, if they work on a No Win, No Fee* Read more basis. Therefore, you can submit a claim knowing that you won’t have to pay their fees unless you receive your PCP compensation.
Another reason people delay claiming is that they believe it will take more time and effort than it’s worth. While the claims process can sometimes be lengthy and complex, the FCA has confirmed the details of its redress scheme, and payouts should start in 2026. One of the benefits of choosing a claims management company is that they will deal with all the paperwork and evidence needed to submit your claim, removing any unnecessary stress, effort, or time constraints on your part. There is also often a social stigma attached to making a claim, but if you were mis-sold, it’s worth fighting to get your money back, win a bit of justice and prevent them from mis-selling to other consumers.
Finally, you may be concerned that submitting a car finance claim could negatively affect your relationships with current or future lenders. You will not be blacklisted for making a claim. While this could have occurred in the early 2000s, it has since been outlawed, and lenders are not permitted to blacklist you or treat you worse because you have complained. Likewise, your claim won’t be included in a product application assessment, so it won’t affect your chances of being approved by a different lender.
Ultimately, car finance mis-selling isn’t a victimless scandal. Millions of motorists have lost money due to mis-selling, and we strongly believe in helping them recover their money. The benefits of claiming far outweigh any negatives.
Holding Car Finance Lenders Accountable
Car finance claims are crucial in holding dishonest companies accountable. They provide those seeking financing a voice against abusive practices. Consumers can create a support network by targeting companies that use these tactics and raising society’s awareness of the issue.
Moreover, filing a claim against a lender can lead to legal scrutiny of their practices. Courts and regulatory bodies can impose fines, demand compensation for affected consumers, and even revoke licenses in extreme cases. The threat of legal consequences serves as a deterrent against unethical behaviour.
Car finance claims often require investigation by regulatory bodies, which can lead to increased monitoring of the entire industry. These investigations can uncover systemic issues and lead to broader regulatory reforms, ensuring all lenders adhere to fair practices.
It’s also important to highlight that lenders are conscious of their reputation in the market. Companies sued for abusive practices against their clients have their reputations significantly damaged, which requires them to correct their course of action. They are forced to come forward to explain what happened and what they will do to ensure that unethical and potentially illegal activity ceases. In a competitive market, reputation can be a significant asset or liability, incentivising lenders to act ethically.
The financial ramifications of car finance claims, including compensation payouts and legal costs, directly affect lenders’ bottom line. The potential for economic loss can be a powerful motivator for companies to maintain fair lending standards to avoid lawsuits.
How to Start Your Car Finance Claim
If you find yourself in any of these situations, the first step is usually to contact your credit provider to discuss the issue. If you’re dissatisfied with their response, you can escalate the claim yourself for free using formal complaint channels, such as the Financial Ombudsman Service. You can also choose to speak with our team to understand your options and determine the best course of action.
Remember, the specific terms and conditions of your agreement, as well as the laws of your jurisdiction, will impact your ability to file a complaint. Use our free eligibility checker to see if you can claim. The check takes less than two minutes to complete.
