If you had a motor finance agreement with undisclosed commission, there’s a chance you could claim compensation. The Financial Conduct Authority (FCA) is running a compensation scheme for mis-sold car finance, and anyone eligible could receive an average of around £800 for each agreement. Here’s what’s happening and what you could do next.
Avoid using a claims management company or law firm
Claiming compensation you’re owed won’t cost you anything if you do it yourself.
You might have seen adverts for companies who can claim compensation on your behalf. These companies normally take a large cut of any compensation – up to 36%.
A claims management company or law firm won’t be quicker or do anything you can’t do yourself – and avoiding them might save you £100s.
What if I’ve already signed up with a claims management company?
If you’ve already signed up with one of these firms, you can cancel. But you’ll need to check if you have to pay a cancellation fee. If you do, this must be fair and reflect how much work the firm has done already.
The firm should give you a summary of the work they’ve carried out so far. If you don’t think they’re explaining things clearly, you can complain to the firm. You can also do this if you believe you were misled by advertising, charged unreasonable fees or treated unfairly.
If you’re unhappy with the firm’s their response, you can raise your complaint with:
Lenders could still appeal against the scheme
All of our information about the compensation scheme is based on what the FCA have announced. However, lenders have until 27 April to appeal against the scheme, which could delay compensation payouts.
We will regularly update this page with all confirmed information as soon as we can.
Who is eligible for compensation?
Each motor finance agreement you had will be eligible for compensation if you were not told that it:
- included a discretionary commission arrangement (DCA)
- had unfairly high commission or
- had a contractual tie - an arrangement between the lender and broker, giving them exclusive rights to provide credit.
Your agreement only needs to have been affected by one of these to be eligible for compensation. It also needs to have been agreed between 6 April 2007 and 1 November 2024.
Personal Contract Purchase (PCP) and Hire Purchases (HP) agreements will be eligible. If you leased a car through Personal Contract Hire (PCH), you won’t get compensation through this scheme.
There’s a better chance you’ll get compensation if your agreement had a DCA
One type of commission, called a discretionary commission arrangement (DCA), has been banned. Customers who had finance agreements with a DCA are likely to receive compensation.
If you think you might have bought your vehicle with a DCA agreement you can put in a complaint now.
If your agreement didn’t have a DCA
There’s a chance you’ll be owed money if:
- commissions in your finance agreement weren’t disclosed to you properly, and
- the amount you paid in commission was unfairly high.
If you feel that your agreement was unfair, the next step is to submit a complaint.
What happens next?
The FCA announced the details of the compensation scheme on 30 March 2026.
The scheme is split into two:
- For agreements made after 1 April 2014, the compensation scheme will begin on 30 June 2026.
- For agreements made before 1 April 2014, the compensation scheme will begin on 31 August 2026.
When will I hear from my lender?
Once the scheme starts, your lender will invite you to join the scheme within:
- three months if you submitted a complaint before the scheme began, or
- six months if you did not.
Once you’ve joined the scheme:
- your lender will confirm if you’re owed compensation, along with how much you’ll get, within three months
- you’ll be paid the amount you’re owed within the following one month.
You can also use the FCA’s tool to check when you will hear from your lenderOpens in a new window
Do I need to complain?
Customers who have submitted a complaint before 30 June will get compensation faster – within three months of the scheme beginning.
If you choose not to complain, you will still get a payout if you’re eligible, but it could take up to six months after the scheme begins before you’re contacted.
Using a free template to submit a complaint means you can avoid claims management companies and ensure you get all of the money you’re owed.
Making a complaint
Use a free complaint letter template
If you’re thinking of complaining, it’s a good idea to use a free template letter so that you don’t need to pay a claims management company or law firm. These companies can charge up to 30% of any compensation that’s due to you and won’t be any quicker.
There are free complaint letter templates available on:
Submitting your complaint
Gather any information about your car finance. Then complain to your lender, ideally in writing.
You’ll need to complain to the firm you were paying each month. If you’re not sure who that is, you can check your credit report (if the agreement was active in the past six years) or old bank statements if you have them.
Tell the lender you think you’ve been charged undisclosed commission and include as much information as you have.
If you’re eligible for compensation
If your lender agrees that you’re eligible for compensation, they will invite you to join the compensation scheme. This should happen within three months of the scheme beginning.
Once you’ve joined the scheme:
- your lender will confirm if you’re owed compensation, along with how much you’ll get, within three months
- you’ll be paid the amount you’re owed within the following 28 days.
If your lender says you’re not eligible
Lenders are obliged to pay you compensation if you meet the FCA’s criteria on who is eligible. If your lender says you aren’t eligible, unfortunately it’s unlikely that you’ll be due any compensation.
However, if you disagree you can still take your complaint to the free Financial Ombudsman ServiceOpens in a new window You can also do this if you don’t get any response from your lender.
Where can I find the latest information?
The FCA will be publishing information about the scheme and how to ensure you get your compensations. See the latest information from the FCA about car finance complaintsOpens in a new window, or call them on 0800 111 6768Opens in a new window.
You can also learn more about the different kinds of eligibility on our blog post Mis-sold car finance – who will get compensation and how will it be paid?