If you had a motor finance agreement with undisclosed commission, there’s a chance you could claim compensation. The Financial Conduct Authority (FCA) put forward a compensation scheme for mis-sold car finance where anyone eligible could receive an average of over £800 for each agreement but the scheme has been delayed by legal challenges. Here’s what’s happening, what you can do and what you should avoid.
Legal delays to the compensation scheme
Following legal challenges, the courts have suspended parts of the compensation scheme. They will hear the cases in February 2027.
For some people expecting payouts means delays until at least Spring 2027. A few people might receive an offer of compensation before then but not everyone.
Lenders waiting for the outcome do not have to calculate or pay compensation until the legal judgement comes through, though one company started to make offers from November 2026Opens in a new window. The FCA has published a factsheet about settlement offers
What happens next in the legal challenge?
There are three possible outcomes:
- Compensation might be paid out in 2027 if the courts are happy with the FCA’s scheme and there are no appeals.
- If the courts reject a part or all of the scheme, the FCA say payments could be pushed back as far as 2028.
- Or, if the scheme is overturned and the FCA is worried about more delays for those waiting, it has said it could suggest everyone complains directly to their lender. Companies would need to respond within 8 weeks. If you’re not happy with their decision, you’d complain to the Financial OmbudsmanOpens in a new window
What to consider if you receive a settlement offer
The FCA has written guidance about settlement offers on complaintsOpens in a new window which lenders have to send out with any offers they make. Any offer must match, or be more than, what you’d get under the compensation scheme.
Some companies might choose to make voluntary offers to some people while waiting for the result of the legal challenge.
If you get an offer, the FCA say you should check how it's calculated, whether it's right for you, and that's it's not a scam - which means making sure it's definitely from your lender.
You can:
- accept the offer now and get the compensation set out
- wait for the legal proceedings to finish to see what’s agreed (appeals might mean no payments until 2028)
- file a claim in a county court.
If you accept the offer, the compensation will be ‘full and final’ - you’ll be out of the scheme. Your complaint will be over and you will not be able to claim more later, even if it turns out you would’ve got more when the legal challenge is decided. Equally, the lender will not be able to take any money back from you if the legal outcome says they owe you less than they offered.
If you refuse the offer, your lender must still respond to tell you if you’re owed money and how much, but the timeline for their reply depends on what happens in the courts.
There’s still time to complain. The sooner you complain, the quicker you’ll know if your complaint is accepted or rejected.
We will regularly update this page with all confirmed information as soon as we can.
If you complain but are not owed compensation
If you’ve already complained, lenders will need to tell you if you are not owed compensation under the scheme.
In some cases your lender might not be sure yet if you’re eligible or not. This is because the legal challenges are looking again at:
- when you are out of time to complain and
- how obvious it was to you that the car maker, the dealer and the lender were linked.
How you can complain if you do not think your lender’s decision is fair
If your lender says you’re not owed compensation but you think this is a mistake:
- First ask your lender to review their decision.
- If you’re unhappy with that result, you can complain to the Financial Ombudsman Service.
- You could claim through the courts. This might be expensive.
- If your complaint also includes things outside the scheme, your lender should still tell you the outcome of the part of your complaint not in the scheme.
Avoid using a claims management company or law firm
Claiming compensation yourself will mean you keep every penny you’re owed.
You might have seen adverts for companies who can claim compensation on your behalf (known as claims management companies, or CMCs). These companies normally take a large cut of any compensation.
For example, if you were owed £1,000 in compensation:
- using a CMC could leave you with as little as £640 of the money you’re owed
- but complaining yourself will ensure you get the full £1,000.
Avoid car finance ‘money tips’ adverts by CMCs and law firms on social media. Research by regulators including the Financial Conduct Authority (FCA) has found ads that seem to offer independent advice from an expert or celebrity are often actually paid promotions from CMCs and law firms encouraging people to sign up for car finance claims.
A CMC 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. You can ask to exit for free if you were signed up without consent, misled or treated unfairly. If you do cancel, any fee 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 how a CMC or law firm has dealt with your case, you can complain directly to the firm. The FCA has created a template letter you can download to help with your complaintOpens in a new window
If you’re unhappy with the firm's response, you can raise your complaint with:
Who is eligible for compensation?
You could be eligible for compensation for any motor finance agreement (including cars, vans, campervans and motorbikes) 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.
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. However, 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.
You can do this now. Find out how to make a complaint
Do I need to complain?
Customers who submitted a complaint before the scheme was due to start (originally 30 June 2026) should get compensation faster.
If you choose not to complain, you will still get a payout if you’re eligible, but it is likely to be slower.
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.
How to make 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 36% of any compensation that’s due to you and won’t be any quicker.
The FCA lists each company’s contact details and how to complainOpens in a new window to them.
There's also a free complaint letter template 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.
Once you’ve joined the scheme:
- your lender will confirm if you’re owed compensation, along with how much you’ll get
- you’ll then be paid the amount you’re owed within a set time frame still to be confirmed.
If you’ve already complained, your lender might tell you if you’re not owed compensation. But some firms might wait until the legal process finishes before letting you know, so if you've not heard yet, you could still have your complaint refused.
If your lender says you’re not eligible
Lenders must 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.
Beware of fake compensation and car finance lender scams
Car finance compensation is a big news story – unfortunately, this means fraudsters are contacting people to offer them compensation to trick them into giving away their personal information.
Be extremely careful of any unexpected calls, messages or emails you receive claiming to be from car finance companies or the government. They might pretend you need to enter your bank details, personal information or credit card numbers to receive compensation – and then use this to steal your money or identity.
How can I check if a message is legitimate?
If you want to make sure that you’re dealing with your lender, you can:
- call the FCA’s helpline on 0300 124 8899
- check the FCA’s list of lendersOpens in a new window, which includes contact details for each firm involved in the scheme.
Learn more about what to watch out for in our guide Am I being scammed? How to tell if you’ve been targeted.
If you’re worried someone might have stolen your personal information or identity, read our blog post Could someone have stolen your identity?
Where can I find the latest information?
The FCA will be publishing information about the scheme and how to ensure you get your compensation. 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?