Slater and Gordon are the car finance claims experts

What are mis-sold car finance claims?

Car finance agreements can be complex, and commission is paid on millions of contracts taken out.

This means that finance providers often pay the car dealership a fee for selling-on a finance deal to a car-buyer. Commission isn’t always prohibited, but it is essential that consumers are aware that a commission payment will be made and how much it will amount to.

Following concerns about potential mis-selling, the Financial Conduct Authority (FCA) launched an investigation into commission payments made on vehicle finance agreements.

As a result, the majority of finance deals taken out between April 2007 and November 2024 could have been mis-sold.

When customers take out motor finance contracts, it is essential they are given the information they need to determine whether the contract they are entering into works for them and is financially valid. If you have taken out a PCP or HP contract where information has been withheld, or purposefully confused or hidden, you may have been mis-sold, and are therefore entitled to make a claim.

Enter your details to find out if you are eligible to claim compensation

What is the process?

You can self-represent and approach the lender directly, go to the Financial Ombudsman Service (FOS) at no cost, OR you can submit a claim with us and we'll do all the legwork for you.

Slater and Gordon operates on a No Win No Fee basis. This means it costs you nothing upfront to join. If your claim is successful, we’ll take a pre-agreed percentage as our fee. If we do not win your claim, you won’t owe us a penny. We only charge what is permitted by the SRA and details of this can be found in our agreement.

What is FCA redress scheme?

The FCA is proposing a formal compensation scheme for consumers who were mis-sold car finance agreements - particularly where commission arrangements between lenders and brokers were not properly disclosed. The FCA is now consulting on how the scheme will work, with the consultation running until 11 November 2025.

The scheme is expected to launch in 2026 and could result in compensation for millions of consumers like you.

Can I make a car finance claim?

Taking out a car finance agreement is a significant commitment, and if you haven’t been given the information and transparency you need to make the right choice, you are entitled to make it right.

You may have been mis-led or kept in the dark about commission payments, including discretionary commission arrangements, and you may be eligible for compensation.

Won’t my lender send me a refund automatically under the FCA’s mis-sold car finance redress scheme?

The FCA’s redress scheme is designed to provide compensation to anyone affected by mis-sold car finance and puts the onus on lenders to identify and contact eligible customers. However, there can be problems with this approach.

Firstly, it is not clear how far the FCA will instruct lenders to go if they have difficulty contacting you. This means that if you’ve moved house, changed your phone number, or have a new email address, it may be difficult for the lenders to trace you to discuss compensation.

Secondly, lenders are only required to hold the details of finance agreements for six years. This means that if your agreement is older than this, there’s a chance they no longer hold your information to determine whether you are eligible or contact you if you are.

In either case, it can be easy for people to miss out on their entitlement to mis-sold car finance compensation.

How do I know if I've been mis-sold car finance?

The FCA has warned that you may have been mis-sold PCP or HP finance if any of the following are true:

• You bought a car under a finance scheme (such as a hire purchase or PCP agreement) before November 2024
• There was a commission arrangement between your lender and broker
• You were not aware of the commission arrangement

If you have been affected by any of the above, or felt you were pressured into taking out car finance with your dealership, you may be eligible to make a claim.

Find your agreements

How can a mis-sold car finance lawyer help me with my claim?

There are many benefits to having the legal support and guidance of a mis-sold car finance lawyer on your side when making a claim.

For a start, a lawyer can handle the process for you from end-to-end, including support in locating your old finance agreements, ensuring your complaints are submitted with the correct documentation and evidence, and progressing your claims in line with the latest developments from the FCA’s redress scheme.

Your mis-sold car finance lawyer will also handle all communications with your lenders, protecting your interests at each stage and ensuring lenders play by the rules, so you can rest assured that you’ll receive the compensation you are owed.

How can using a law firm to claim mis-sold car finance rather than handling the claim myself benefit me?

For some, making a mis-sold car finance claim yourself can be a good option, but if this is the route you wish to take, it’s important to understand what this entails and the commitment it will need.

To make a claim yourself, you’ll need to:

• Find your old car finance agreements and identify the lenders (this can be tricky if you’ve had multiple agreements or they are older than six years)
• Submit a formal letter of complaint to your lender
• Keep up to date with the FCA’s consultation and redress scheme
• Monitor your claim’s progress and keep up communication with your lenders to avoid missing any deadlines, as this could impact your outcome

It is entirely possible to make your own mis-sold car finance claim (or claims), but you need to be sure you’re happy to commit the time and effort it will take in the long term.

By joining a group action and instructing a mis-sold car finance lawyer to handle your claim(s) for you, you can take the stress out of claiming.

We’ll handle the process for you, including taking all reasonable steps to locate any relevant agreements and documentation, preparing and submitting your complaints, and managing communications with your lenders. This helps ensure your claim is progressed properly and in line with the latest FCA guidance.

The different types of car finance agreements available

Personal contract purchase (PCP)

A PCP is a popular way of financing a car. Taking out a car on a PCP finance agreement means that you typically pay a deposit up front and then a monthly fee for the car for an agreed number of years. Towards the end of the deal there is the ability to either give the car back for no extra cost or you can pay a substantial lump sum which enables you to keep the car, or you can put the value towards a different car with the same dealership.

Hire purchase agreement (HP)

HP is another way to finance a car. Ordinarily you will pay a deposit, then pay a set amount each month until the loan for the value of the car is paid off in full. With HP, you will own the car once you have made all of the required loan payments.

How do I check if I was mis-sold car finance?

Understanding whether your car finance loan was mis-sold can be tricky, and it can be difficult to know where to start. At Slater and Gordon, we believe that everyone affected by mis-sold car finance should have the opportunity to claim their refund, without the headache. That’s why we’ve made it straightforward – to check if you’re eligible for a car finance refund, simply enter your registration number and we’ll let you know if you’ve got a claim.

Find your agreements

How much can I claim for mis-sold car finance?

The FCA has indicated that compensation may average around £700 per car finance agreement, calculated as approximately 17% of the interest cost paid under the agreement. While this figure is an estimate, and amounts will vary dependant on individual circumstances, it gives a general sense of the scale of redress being considered.

The value of a mis-sold car finance claim will depend upon the number of contracts, total value of the contract, the amount of interest you paid, and the value of any hidden charges. This means that some could be owed thousands in compensation.

To find out how much you could be owed, check your vehicle registration here.

Which finance companies are being investigated for mis-sold car finance?

The FCA’s investigation is currently underway and is predicted to continue until December 2025. There are a number of finance companies and lenders suspected of mis-selling car finance.

If you have previously financed your vehicle and you believe you have been mis-sold an agreement for the non-disclosure of commissions received by the dealership, or you were inadequately informed of the hidden costs and interest rates, you could be eligible to receive compensation. It is worth getting in touch and finding out if you’re eligible.

We are happy to take on all complaints relating to vans, caravans, motorbikes, boats, planes or any other motor vehicles, but please note that the ongoing FCA investigation is in relation to cars only. The other categories of motor vehicle complaints will be explored with the Regulator moving forwards.

How long does a mis-sold car finance claim take?

The time it takes to finalise a mis-sold car claim can vary from case to case, as it will often depend on how quickly your car dealer or credit broker accepts they are responsible. If liability is accepted quickly, cases can be wrapped up within months. Where liability is disputed, this can take much longer.