Last updated:
10 June 2026
The Financial Conduct Authority (FCA) has announced a compensation scheme for customers who were mis-sold car finance. Anyone eligible could receive an average of around £830 for each agreement. Find out who could get compensation, what you need to do next and why you should avoid claims management companies and law firms.
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 (known as claims management companies, or CMCs). These companies normally take a large cut of any compensation – up to 36%. For example, if you’re owed £1,000 in compensation, a CMC could claim up to £360 of the money you’re entitled to.
Avoid car finance ‘money tips’ adverts by CMCs and law firms on social media. Research by regulators including the 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.
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:
All of our information about the compensation scheme is based on what the FCA originally announced. However, legal challenges against the scheme mean that it could be delayed.
We will regularly update this page with all confirmed information as soon as we can.
Each motor finance agreement you had could be eligible for compensation if you were not told that it:
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. However, if you leased a car through Personal Contract Hire (PCH), you won’t get compensation through this scheme.
A small number of high-value loans aren’t included in the compensation scheme – you can check the details on the FCA’s car finance complaints pageOpens in a new window
If your agreement had a DCA that you weren’t properly told about, it’s very likely that you’ll be owed compensation. You’ll be eligible so long as:
DCAs were a hidden type of commission that allowed dealers and brokers to increase the commission they earned by charging customers more.
The arrangement meant that a broker could set a higher interest rate on an agreement, meaning they would earn more in commission.
DCAs were outlawed in January 2021. So, no car finance agreements made since then will include a DCA.
The best way to find out is to check through your car finance paperwork, if you still have it. If this isn’t possible, you can submit a complaint and your lender will contact you if you're eligible.
Even if you're not sure and choose not to complain, you should still get compensation if your agreement included a DCA.
Some firms have claimed that they never used DCAs. You can see a list of companies not using DCAsOpens in a new window on MoneySavingExpert.
The FCA has provided guidelines for how they will decide if you paid an unfairly high commission.
If the commission in your agreement wasn’t explained to you properly, you will be eligible for compensation if it was at least:
However, many agreements won’t have made these figures clear.
You can either:
Some motor finance agreements were mis-sold because a contractual tie existed. This means that the dealer had an agreement with a lender to only offer you their finance option rather than searching the market for a better deal.
If you weren’t told about a contractual tie, you’ll likely be eligible for compensation. Some agreements where lenders and dealers had visible links (such as sharing a name) aren’t included in the scheme.
You can either:
The FCA announced the details of the compensation scheme on 30 March 2026.
The scheme is split into two:
However, legal challenges against the scheme are likely to cause delays, meaning these dates could change.
Once the scheme starts, your lender will invite you to join the scheme within:
Once you’ve joined the scheme:
You can also use the FCA’s tool to check when you will hear from your lenderOpens in a new window
It’s possible that some lenders won’t have contact details for affected customers. In this case, you’ll need to reach out to them and look to make a claim.
You’ll have a year from when the scheme started to contact your lender. So, if you aren’t sure if your lender has your details, it’s a good idea to get in touch with them and submit a complaint.
Customers who have submitted a complaint before the scheme is due to start (currently 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.
There are free complaint letter templates available on:
If you’re not sure who provided your car finance agreement, you can:
If your agreement was active in the last six years, you can check your credit report. Your provider should be listed in there. Equifax also has a free car finance checker appOpens in a new window which shows agreements going back to 2007.
You can then provide this information to your lender as evidence you had an agreement, which will ensure you’re included in the compensation scheme if you’re eligible.
If you already had a complaint rejected but you still believe you’re eligible, you can submit another complaint.
If you decide not to complain again, your lender will still need to contact you if they find that you’re eligible for compensation. If this happens, they’ll ask if you want to opt in for a payout.
Car finance compensation is a big news story – unfortunately, this means fraudsters are contacting people to offer them compensation as a way 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.
If you want to make sure that you’re dealing with your lender, you can:
call the FCA’s helpline on 0300 124 8899
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?
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.
