Car finance redress
You can claim in two stages, lender first and then the ombudsman, without paying anyone. Neither stage needs a claims firm.
Worked example
Did a DCA apply? What was the commission amount and type? Was it disclosed to you, and how? What APR was applied? Our template covers all four, so you don't need to argue the law. Just ask these factual questions.
Redress estimate
Any figures here are an estimate, not a promise, and nothing on this page is financial or legal advice. You can claim free yourself — you don't need a claims firm.
To claim car finance compensation yourself, complain to your lender first, then escalate to the Financial Ombudsman Service if you're unhappy with the reply. Write to the finance company named on your agreement, not the dealer. Both stages are free, so you keep everything you're owed.
You do not need a claims-management company taking a cut. Any figure you see is an estimate, not a promise. Nobody is guaranteed a payout, and the amount depends on your own agreement. Estimate first with the compensation calculator. The rest of this page covers the steps, claims-firm costs and what to do if the lender says no.
How to claim car finance compensation yourself
You can claim in two stages, lender first and then the ombudsman, without paying anyone. Neither stage needs a claims firm.
The complaints process is designed for consumers to use directly. A clear, polite letter to your lender starts it; the Financial Ombudsman Service is the free backstop if the lender says no. The FCA built the 2026 redress scheme on the same two-stage model, so the DIY route and the scheme route use the same steps.
The scheme rules were made on 30 March 2026, but parts of the scheme have been suspended since 29 June 2026 while a legal challenge is heard (16 February to 3 March 2027). Until the legal process ends, lenders do not need to calculate or pay compensation. You do not have to wait to complain: a free complaint to your lender still counts, and if your lender has not contacted you the deadline is 31 August 2027 under the scheme rules as made, which may change after the legal challenge.
Do you need a claims company?
No. You do not need a claims-management company, and using one means giving up a slice of your money. Claims firms can take up to 36% including VAT out of any payout.
There is nothing a claims firm does here that you can't do yourself for free. The lender and the Financial Ombudsman Service both deal with you directly, and the questions on the form are the same whether you or a CMC fill them in. A CMC cannot get you a faster or larger payout, because the lender and the ombudsman apply the same rules to every complaint.
On an average scheme payout of about £829, a 36% CMC fee would mean handing over roughly £300. On a larger figure, the slice grows in step.
Keep 100%
Before you start: gather your details
You need four pieces of information from your agreement before you write. The lender can resend a copy if you've lost it.
If you've sold the car or settled early, you can still claim, because the complaint is about the credit agreement, not the car.
- Lender's name: the finance company on the agreement, not the dealer. See how to find your lender.
- Agreement number: on your original credit agreement or any statement.
- Start date: so you can confirm it falls between 6 April 2007 and 1 November 2024.
- APR / interest rate: the yearly cost of borrowing you were charged.
Step-by-step
Follow four steps: gather your details, complain to the lender, wait for their reply, then escalate to the ombudsman if needed.
- Gather your agreement details: lender, start date, agreement number and APR.
- Write to your lender asking whether a discretionary commission, high-commission arrangement or contractual tie applied, using our free letter template.
- Give the lender time to respond (they usually have up to eight weeks, but the FCA says the timing of answers under the scheme is uncertain while parts of it are suspended).
- If you're unhappy or get no reply, escalate free to the Financial Ombudsman Service, usually within six months of their final response, or by the date given in a scheme redress letter.
What your letter should ask
What it costs
It costs nothing. Complaining to your lender and escalating to the Financial Ombudsman Service are both free.
The only cost of using a claims firm is the cut they take, up to 36% including VAT. Any figure you see is an estimate, not a promise. Nobody is guaranteed a payout, and the amount depends on your own agreement. If a firm asks for an upfront fee, treat it as a red flag: the real scheme never requires one.
| Route | Fee | You keep |
|---|---|---|
| Free DIY (lender + FOS) | £0 | £1,000 |
| Claims firm at 20% | ~£200 | ~£800 |
| Claims firm at 30% | ~£300 | ~£700 |
| Claims firm at 36% | ~£360 | ~£640 |
The maths on an average payout
No real scheme asks for money up front
How long it takes
Under the normal complaint rules a lender has up to eight weeks to give a final response, then the ombudsman can take a few months more. For a car finance commission complaint the FCA says the timing is uncertain while parts of the scheme are suspended, and scheme payouts are expected in 2027 at the earliest, if the scheme is upheld and the judgment is not appealed.
The scheme was challenged in the Upper Tribunal by CA Auto Finance, Mercedes-Benz Financial Services, Volkswagen Financial Services and Consumer Voice, and parts of it have been suspended since 29 June 2026. The hearing is listed for 16 February to 3 March 2027, with a judgment expected in the following months. Until the legal process ends, lenders do not need to calculate or pay compensation, but free DIY complaints can still be made. Treat any "you'll be paid by [exact date]" promise with caution.
| Stage | Who does it | Typical time |
|---|---|---|
| Lender's final response | Your lender | Up to 8 weeks normally; uncertain for scheme cases while parts are suspended |
| FOS referral window | You | Within 6 months of the final response, or by the date in a scheme redress letter |
| FOS investigation | Financial Ombudsman | Several months |
| Scheme bulk payouts | Your lender | On hold; expected in 2027 at the earliest, if the scheme is upheld and the judgment is not appealed |
| Final consumer deadline | You | 31 August 2027 under the scheme rules as made, which may change after the legal challenge, if your lender has not contacted you |
You don't have to wait for the legal challenge to end
What happens if the lender says yes
If the lender accepts your complaint, it sets out the redress it calculates and pays it, usually as cash or as a credit if the agreement is still live. You don't have to accept the figure.
Compare any offer against your compensation estimate. If the figure looks right, accepting it usually closes the case. If it looks low, especially where the commission was large or the term long, you can still query it or refer it free to the Financial Ombudsman Service.
Accepting a "full and final" offer normally ends the complaint on that agreement, so check the wording before you sign. If you're unsure, take a day to compare the offer with your estimate rather than signing on the spot.
An offer is not compulsory
Watch-outs while you claim
Stay calm, keep records, and ignore pressure. Tidy records make escalation easier, and pressure to sign quickly is a warning sign.
- Keep a dated copy of every letter and email you send and receive.
- Ignore cold calls: the FCA never rings you out of the blue about car finance.
- Don't sign with a CMC under time pressure: there is no benefit to getting in early.
- Check any firm on the FCA register before engaging, and report scams to Action Fraud.
Use the free letter template
Don't start from a blank page: copy our ready-made complaint letter. It already asks the key questions about discretionary commission, high-commission arrangements and contractual ties.
Use the free letter template, and estimate your position first with the compensation estimator. The template asks exactly what the FCA scheme asks (did a DCA apply, what was the commission, was it disclosed, what APR was charged), so you don't need to argue the law, just request the facts.
Common mistakes to avoid
Most failed complaints stumble on the basics, not the law. Get these right and the process runs smoothly.
- Complaining to the dealer, not the lender. The lender, named on your agreement, is who decides the complaint, not the showroom.
- Missing the six-month FOS window. Once the lender gives a final response, you usually have six months to refer the case to the ombudsman; for a scheme redress letter, use the date the letter gives.
- Signing with a CMC under pressure. A claims firm can't get you a faster or larger payout; it only takes a slice.
- Vague letters. Ask the four factual questions (DCA, commission amount, disclosure, APR) rather than demanding a payout.
- No paper trail. Keep dated copies of every letter and email, because you'll need them if you escalate.
Don't accept the first offer without checking
If your lender rejects your complaint
A rejection from the lender is not the end: it's the gateway to the Financial Ombudsman, which is also free. The ombudsman looks at your case independently and can disagree with the lender.
Lenders sometimes reject complaints at the first stage, and while parts of the scheme are suspended some people are being told they are not owed compensation under the parts that still apply. If that happens, read their reasons, and if you still think you were affected, refer the case to the Financial Ombudsman Service by the date given in the lender's letter (usually within six months). The ombudsman reviews the facts independently and can overturn the lender's decision.
You don't need a lawyer or a claims firm for this. A clear letter explaining why you disagree is enough.
Rejection is not final
Keeping a paper trail
A tidy paper trail is the single most useful thing you can do. It makes escalation simple and protects you if anything is disputed.
If you later need to go to the ombudsman, you'll send them this bundle. The more complete it is, the faster they can decide.
- Save every letter and email in one folder, with dates.
- Note any reference numbers the lender gives you.
- Keep your original agreement and statements.
- Record who you spoke to and when, if you call.
Frequently asked
How do I claim car finance compensation myself?
Do I need a claims company?
What does it cost to claim?
How long does the lender have to reply?
When will I be paid?
Should I complain to the dealer or the lender?
What if the lender offers me less than I expected?
Can I claim on more than one agreement?
Sources
We cite regulators and official UK sources only.
- Financial Conduct Authority — motor finance redress schemefca.org.uk
- UK Supreme Courtsupremecourt.uk
- Consumer Credit Act 1974legislation.gov.uk
- Financial Ombudsman Servicefinancial-ombudsman.org.uk
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