Were You Mis-Sold Car Finance?

Were you mis-sold car finance?

You were potentially mis-sold if your car finance carried hidden, high or discretionary commission that pushed up your interest rate, and nobody told you. The clearest cases sit in the window from 6 April 2007 to 1 November 2024.

"Potentially" matters: being inside the window doesn't prove a problem. The FCA estimates about 12.1 million agreements fall in scope, but each is assessed on its own facts. Being in the window means your deal is worth checking properly, and checking costs nothing.

The eligibility checklist (PS26/3, tightened)

Three things together make a deal worth checking: the dates, a commission link, and a lack of disclosure. The final scheme tightened the test, so 0% and minimal-commission deals are now excluded.

The more of these that apply, the stronger your case. If your deal had no broker commission at all, there is no conflict to put right and you are generally outside the scheme.

• Dates: your agreement started between 6 April 2007 and 1 November 2024, where commission was payable to a broker.
• Route: it was arranged through a dealer or broker paid commission, not a direct bank loan.
• Commission problem: you were not told about a DCA, a high-commission arrangement (commission at least 39% of total cost of credit and at least 10% of the loan), or a contractual tie.
• Not excluded: your deal was not a 0% or minimal-commission arrangement.

Eligibility at a glance

Some situations clearly qualify, some clearly don't, and some need checking. Use this table before assuming either way.

Leasing (PCH) is a hire agreement, not motor finance with a commission to a broker, so it is outside the scheme. The same applies to a direct bank loan you arranged without a broker.

How to check your paperwork

Dig out your original finance agreement and look for the APR, the lender's name and any mention of commission. If commission isn't mentioned at all, that's worth asking about.

Our letter template asks the lender those exact questions for you, in the right order.

1. Find your finance agreement (the dealer or lender can resend a copy if you've lost it).
2. Note the start date, the APR and the lender (see how to find your lender if you're unsure).
3. Look for any line about commission. If there's none, ask the lender to confirm whether a discretionary commission, high-commission arrangement or contractual tie applied.
4. Check whether the commission was disclosed in a way the FCA would accept (clear, specific, not buried).

Special situations

A few cases need a different check. Here's how eligibility treats them.

• You've sold the car or settled early: you can still claim, because what matters is when the finance started.
• Your lender has gone bust: a successor firm or an administrator may still deal with a complaint, but the FCA says this type of borrowing is not covered by the Financial Services Compensation Scheme (FSCS), so you may not get compensation.
• You're not sure who the lender was: start with how to find your lender.
• You used a claims firm before: you can still deal with the lender directly, and you do not have to keep paying them.

Estimate what you could be owed

If the checklist broadly fits, the next step is a free estimate, then a free complaint. You don't need a claims firm at any stage.

Try the compensation estimator, then follow how to claim. Claiming is free and you can do it yourself: complain to your lender first, then escalate to the Financial Ombudsman Service. You do not need a claims-management company taking a cut. The scheme average is about £829 per agreement, but your figure depends on your deal, and any amount is an estimate, not a promise. Parts of the scheme are suspended while a legal challenge is heard, so payouts are expected in 2027 at the earliest, if the scheme is upheld and the judgment is not appealed.

Common reasons people think they're excluded (and aren't)

Several things that feel like disqualifiers usually aren't. These are the most common ones.

The honest test is narrow and factual: did a DCA, high-commission arrangement or contractual tie apply, and were you properly told? If you don't know, ask the lender. The letter template does exactly that.

• 'I had a good credit score': credit score doesn't matter. The issue is how the commission was set and disclosed.
• 'I shopped around': shopping around doesn't mean the broker disclosed a DCA. Many customers compared monthly payments, not commission.
• 'I signed the agreement': signing doesn't waive an undisclosed-commission complaint. Disclosure has to be clear and specific.
• 'The dealer was helpful': a helpful dealer can still have been paid under a DCA. The conflict existed whether the dealer was nice or not.