We answer your most-asked questions about car finance claims

What is a mis-sold car finance agreement?

A car finance agreement may be considered mis-sold if:

• Your broker increased your interest rate to earn more commission
• Your dealer earned commission from lender but didn’t tell you
• Your dealer claimed to compare lenders but only offered deals from one provider
• The most common issue involves hidden commission payments that increased the cost of borrowing without the customer’s knowledge

Why are people getting refunds for car finance

For years, many drivers unknowingly paid higher interest rates because brokers or dealers earned commission from lenders, often without telling the customer. This lack of transparency is now at the heart of widespread mis-selling claims.

In 2021, the Financial Conduct Authority (FCA) banned Discretionary Commission Arrangements (DCAs) a practice where dealers could raise interest rates to increase their own commission.

Since then, legal rulings have widened the definition of what’s considered unfair:

• In October 2024, the Court of Appeal ruled that any inflated interest rate or undisclosed commission - not just DCAs - could make a finance agreement unlawful.
• In August 2025, the Supreme Court confirmed that failing to disclose commission may trigger legal liability for lenders.

In response, the FCA launched a formal consultation on a redress scheme to compensate affected customers.

Which car finance companies are being investigated?

The Financial Conduct Authority (FCA) hasn’t published a full list of lenders under investigation. However, media reports and legal cases suggest that a wide range of lenders may be affected, including both well-known high street names and smaller or specialist finance providers.

If you took out a car, van, or motorbike finance agreement through a dealership or broker at any time since 2007, there’s a chance your agreement could be eligible.

What’s the latest on the car finance redress scheme?

The FCA is currently consulting on a redress scheme aimed at compensating drivers who were overcharged due to unfair commission practices.

Under the proposed scheme, lenders will be required to contact affected customers within six months of the scheme going live. If you’ve already submitted a complaint, you may be among the first to receive compensation.

Early estimates suggest average payouts of around £700 per agreement, though this will vary depending on individual circumstances such as the size of the loan, the interest rate charged, how long the agreement ran and the number of agreements.

How far back can car finance claims go?

The FCA’s proposed redress scheme covers regulated motor finance agreements taken out between 6 April 2007 and 1 November 2024. This includes agreements where commission was paid by a lender to a broker - whether or not that commission was disclosed to the customer.

Both Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements are in scope, as long as they were used to finance a motor vehicle and involved a broker or dealership acting as a credit intermediary.

Can I make a claim for a vehicle other than a car?

Yes. The FCA’s investigation includes other regulated finance agreements such as:

• Motorbikes
• Vans
• Campervans

As long as the finance was arranged through a regulated PCP or HP agreement, you may be eligible.

Can I claim if the vehicle was used for business?

It depends, if you were a sole trader or in a small partnership you might be eligible but only if your finance was less than £25,000 and it must also have been used for personal use. Our experts can guide you about business cars.

Can I claim if the agreement has ended or I no longer own the vehicle?

Yes, you may still qualify even if:

• The finance agreement has ended
• The vehicle has been sold
• You no longer own the car

You’ll need details of the original agreement, so it helps to locate any old paperwork or vehicle information.

How do I start a mis-sold car finance claim?

There are two ways to begin:

1. Submit a complaint directly to your lender: Start by raising a formal complaint with your finance provider if you believe your agreement was unclear or unfair. If they don’t resolve it or you’re unhappy with the response, you can take your case to the Financial Ombudsman Service (FOS), which is free and independent.
2. Start a claim with us: If you prefer professional support, specialist lawyers can review your agreement(s), communicate with your lender(s), advise you on whether mis-selling occurred, and manage the process from start to finish on your behalf.

Our team of car finance claim experts have created a tool to help you find your previous finance agreements. All you need to do is enter a few basic details and we can find the agreements.

Start your car finance claim today

For expert advice and legal guidance, look no further than our team of leading experts. Contact us today on 0330 041 5869 or contact us online to arrange a callback.