If you've used car finance, you may be owed compensation. Find out how to complain and what to expect.
If you've used motor finance to buy a car, motorbike or van, it's very likely that the lender paid the broker (the person that arranges your loan, usually your car dealer) commission for arranging the loan.
We've found that many firms broke our rules and didn't properly tell customers about commission arrangements.
On 1 August 2025, the Supreme Court ruled that, in certain circumstances, the failure to properly disclose commission arrangements could be unfair and therefore unlawful.
We're now consulting[2] on setting up a compensation scheme for eligible car finance customers.
Your next steps
- Most car finance deals arranged through a dealer involve commission. If you’re concerned that you weren't told about commission and may have paid too much for your car finance, then you should complain.
- Under our current proposals, if you complain ahead of us introducing a compensation scheme, your case will be assessed and any compensation paid sooner.
- If you've complained and received an acknowledgement, you don't need to do anything. If you’ve not received an acknowledgement after 8 weeks, you should get back in touch with the firm.
- If you've complained and been sent a final response that you're not happy with, you should take your complaint to the Financial Ombudsman Service[3] by the date you've been given.
If you'd like to receive updates on our work involving car finance complaints and what it means for you, sign up for email updates[4].
Using a claims management company (CMC)
You won't need to use a CMC or a law firm to take part in any compensation scheme we set up.
You can complain now for free without using one, and you don’t need to use a CMC to find out if you’re eligible. If you’re unsure who your provider was, there are a few ways you can check.
If you sign up to a CMC now, you may end up paying for a service you don't need, including up to 36% in fees, including VAT, out of any compensation you may receive.
Already signed up with a CMC or law firm?
If you decide you no longer want to use a CMC or law firm, you can end your agreement. But you may be charged a fee. This fee should be reasonable and should reflect the work the firm or CMC has already done. Find out what to expect if you do decide to use a CMC[5].
Compensation scheme
We estimate that 44% of all agreements made since 2007 will be considered unfair. So, we’re consulting on setting up a compensation scheme for eligible car finance customers.
A scheme would get compensation to people who've lost out. It will be simpler than making a complaint, and you won’t need to use a claims management company.
What could happen and when
Compensation scheme begins
early 2026
Lender writes to you on how to join the scheme
within 3 or 6 months*
Consumers join the scheme
up to 1 month if you've already complained, 6 months if you haven't
Lender confirms if you’re owed compensation and how much
within 3 months
Opportunity to object
within 1 month
Paid what you’re owed
within 1 month
*within 3 months if you've already complained, or 6 months if you haven't.
How the compensation scheme will work
Under our proposed scheme:
If you've already complained
Your lender will let you know if your car finance agreement meets the conditions of the scheme. If it does, your case will be assessed as part of the scheme, unless you tell your lender you don’t want it to be. If your case isn’t eligible to be included in the scheme, your lender will explain why.
If you haven't complained
Your lender will assess if your car finance agreement meets the conditions of the scheme. If it does, they will ask if you want your case to be assessed. You will need to reply to say you want your case to be assessed. If you don’t reply, it won’t be.
If your lender doesn't contact you
For example, your lender may not contact you if they don't have your details. If this applies to you, you'll have a year from when the scheme starts to make a claim.
If your complaint is with the Financial Ombudsman Service
Your complaint will continue to be dealt with by the Financial Ombudsman. Consumers who have already been compensated for issues covered by the scheme will not be included in it.
We’ll set rules for how firms assess claims and calculate any compensation owed. We will also put checks in place to make sure firms are following our rules.
And if you’re not happy with the result you get from the scheme, you’ll be able to take your complaint to the Financial Ombudsman. The Financial Ombudsman will consider the complaint against what it thinks the outcome should have been under the scheme.
Why you would get compensation
Under our proposed scheme, you would be compensated if you weren't told details of at least one of 3 arrangements between the lender and the broker:
- A discretionary commission arrangement, which allowed the broker to adjust the interest rate you paid to get a higher commission.
- A high commission arrangement (35% of the total cost of credit and 10% of the loan).
- Tied arrangements between the lender and broker, which provided exclusive or near exclusive rights to lenders to provide credit.
How much you could get
Not everyone will be owed money. But if you are, the amount you get will depend on many factors. Based on our proposed scheme, we expect people to receive an average of £700 per agreement, but there will be a wide range with many people getting more and many getting less.
This would include interest, which is normally paid on top of compensation. This would be based on the average base rate per year, plus 1% from the date you made the overpayment to the date compensation is paid.
Taking part in our scheme is likely to be simpler than taking your claim to court. After legal fees are applied, you could end up with less.
If you'd like to read and respond to our proposals that we think will be of particular interest to consumers, you can use our online form[6]. Or if you'd like to read and respond to the full consultation with supporting evidence and analysis, find out how.[7]
Who this applies to
We will set out our proposals for the scope of any compensation scheme when we publish our consultation. But this may apply to you if:
- You used car finance for a motor vehicle, for example, a car, van, campervan or motorbike between 6 April 2007 and 1 November 2024 (this includes hire purchase agreements, such as Personal Contract Purchases[8]), and
- Your lender included a discretionary commission arrangement (DCA), a high rate or commission, or a contractual tie that you weren't properly told about.
Our scheme won't apply to you if you leased a car with Personal Contract Hire (PCH)[9].
If this doesn’t apply to you, but you have a complaint about another issue, find out how to complain[10].
Protect yourself from scams
We’ve received reports of scammers calling people and pretending to be from car finance lenders, offering fake compensation. It's important to remember there's no compensation scheme in place yet.
If someone calls you offering compensation, hang up immediately.
You should also be aware of scammers pretending to be from the FCA. We'd never ask you to transfer money to us and we'd never ask for your bank account PINs and passwords.
Find out how to spot fake FCA communications[11].
How to complain
Follow the steps below to make a complaint about commission.
-
1
Get in touch with your provider (either your lender or broker)
Tell your provider why you want to complain about commission on your car finance agreement. Include as much information as you can to help them find your loan. For example, your:
- name
- policy number
- date of the agreement
- vehicle number plate
- address when you took out the agreement
Download our template complaints letter (DOCX)[12]
Finding your provider
If you’re not sure who your provider is:
- Check old bank statements.
- Contact the dealer where you got the car.
- If your agreement was active in the last 6 years, you can also try checking your credit file as your provider may be listed on there. Find out how to access your credit file for free from the Information Commissioner’s Office[13].
-
2
Getting a response from your provider
Once you've made a complaint, your provider should send you an acknowledgement within 8 weeks. If it doesn't, you should follow up to check if it's received your complaint.
Under our current rules, your provider won’t have to send you a final response until after 31 May 2026.
Personal contract hire (PCH) complaints
If you leased a car with PCH, the extension to the time firms had to respond to your complaint ended on 4 December 2025. This is because our proposed compensation scheme won't cover these claims. From 5 December 2025, your provider must send you a final response within 8 weeks.
If you sent your complaint on or after 26 October 2024, the 8-week deadline is reduced by however long your provider had your complaint before the extension was introduced on 19 December 2024. For example, if your provider received your complaint 3 weeks before the extension was introduced, your provider will have 5 weeks from 5 December 2025 to respond.
If you're unhappy with your provider's response
You can complain to the Financial Ombudsman Service. The Financial Ombudsman is a free service that settles complaints between consumers and businesses that provide financial services.
-
3
Taking your complaint to the Financial Ombudsman
It’s important you contact the Financial Ombudsman[14] by the date given in your provider's final response letter, or they may not be able to help.
If you're sent (or have been sent) a final response to a complaint during the following periods:
- For a complaint about a DCA, between 12 July 2023 and 20 June 2024.
- For a complaint about any kind of motor finance commission (including DCAs), between 21 June 2024 and 29 January 2026.
You'll have until the later of 29 July 2026 or 15 months from the date the final response letter was sent to take your complaint to the Financial Ombudsman.
For final responses sent after 29 January 2026, you'll have 6 months from the date the final response letter was sent to take your complaint to the Financial Ombudsman.
It's free and simple to complain to your provider and then the Financial Ombudsman if you're unhappy with a financial product or service. The Financial Ombudsman has information about car finance complaints[14]. If you're concerned about the process, you can get free guidance from MoneyHelper[15].
You don’t need to use a CMC.
Taking your complaint to court
You can also bring a claim about your car finance commission to court. If you’re considering this option, you should think about getting independent legal advice.
Our review into commission arrangements
In January 2024, we launched an investigation into the use of discretionary commission arrangements (DCAs) in car finance.
Before January 2021, some lenders allowed brokers to adjust the interest rates they offered customers for car finance. The higher the interest rate, the more commission the broker received. This was known as a DCA.
DCAs created an incentive for brokers to increase how much people were charged for their car loan. We banned this practice in 2021. But there have since been a high number of complaints from customers about whether they were properly told about the commission involved in the deal.
Providers were rejecting most of these complaints, because they believed they hadn’t acted unfairly and hadn’t caused customers to lose out.
In October 2024, we also started looking at any relevant motor finance commission complaints, including where there was no DCA in place. This followed a decision by the Court of Appeal.
We've given providers until after 31 May 2026 to start responding to certain car finance commission complaints.
We've given providers more time as it’s important that any complaints are dealt with in a consistent, efficient and orderly way. Given the high number of possible complaints, there was risk this may not have happened if we hadn't given providers longer to respond.
Managing this risk is important because this borrowing isn’t covered by the Financial Services Compensation Scheme (FSCS)[16]. This means if your provider goes out of business, you may not get the money you’re owed.
Our review found that many firms broke our rules and didn’t properly inform customers about commission arrangements.
Following our review and the Supreme Court's decision (PDF)[17], we're consulting on setting up a scheme to compensate eligible car finance customers.
If you'd like to stay up to date on our work and what it means for you, sign up for email updates[4].
