Mis-sold car finance – who will get compensation and how will it be paid?
Last updated:
03 July 2026
If you had a car finance agreement between 2007 and 2024, you could be entitled to compensation. Payouts will average over £800, and you can make a claim yourself – but the compensation scheme has been delayed. Find out who could get compensation, what you need to do next and why you should avoid claims management companies and law firms.
At a glance: what you need to know
- New legal challenges against the scheme mean that payouts are likely to be delayed until 2027-28.
- Many car finance agreements from between 6 April 2007 and 1 November 2024 could qualify.
- You’re likely to be eligible for compensation if your agreement had a discretionary commission arrangement (DCA), unfairly high commission or a contractual tie you weren’t told about.
- There’s still time to complain directly to your lender if you think you’re eligible and haven’t yet. Your lender must tell you if they don’t think you’re eligible.
- You don’t need to use a claims management company or law firm to get your money.
- Beware of scammers as some fraudsters are using the mis-sold car finance news to get people’s money or details.
- We will regularly update this page with all confirmed information as soon as we can.
Why should I 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 left 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 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 will be 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.
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
How do I know if I’m eligible for DCA compensation?
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:
- your agreement was arranged between 6 April 2007 and 28 January 2021 - the date DCAs were outlawed
- the agreement was either a Personal Contract Purchase (PCP) or Hire Purchase (HP)
- your vehicle was bought for personal use.
What is a DCA?
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.
Did my car finance agreement 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.
How do I know if I paid unfairly high commission?
Very high commission that wasn’t explained to you properly will mean you’re eligible for compensation, but it needs to reach a certain percentage of the overall cost.
For example:
Your car finance agreement included a loan of £10,000
Over the course of the agreement, you repaid £13,000 (the loan, plus £3,000 interest)
In this example, if you paid over £1,200 in commission, you would be eligible for compensation because of unfairly high commission. This is because the commission is over 39% of the interest, and over 10% of the loan.
However, many agreements won’t have made these figures clear – so if you aren’t sure,
you can either:
- submit a complaint, as your lender will need to contact you to offer compensation if you’re eligible, or
- wait for any compensation scheme to begin, as your lender will still reach out if you’re eligible - but this could take longer than if you complain.
How do I know if my agreement had a contractual tie?
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:
submit a complaint, as your lender will need to contact you to offer compensation if you’re eligible, or
wait for any compensation scheme to begin, as your lender will still reach out if you’re eligible - but this could take longer than if you complain.
Should I submit a complaint?
Customers who submitted a complaint before the scheme was due to start (originally 30 June) should get compensation faster.
If you choose not to complain, you will still get a payout if you’re eligible but you will hear back faster if you complain now.
You do not need to complain again. If you’ve already complained and your lender has acknowledged it, you usually don’t need to complain again. Wait for your lender to contact you.
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 is a free complaint letter template available on:
Finding your provider
If you’re not sure who provided your car finance agreement, you can:
- check previous bank statements
- look for confirmation email or letters
- contact the dealer where you got the car.
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.
What if I had a complaint rejected?
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.
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 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.
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.
