How Do I Know If I Was Mis-Sold Car Finance?
Scheme status (updated 5 August 2026): parts of the FCA motor finance redress scheme are temporarily suspended while the Upper Tribunal considers legal challenges. Lenders do not currently have to calculate or pay compensation under the scheme, the original decision and payment dates no longer apply, and no payment under the scheme is guaranteed. If the scheme proceeds, first payments are expected in 2027 at the earliest. Any dates mentioned below were set before the suspension.
The FCA confirmed motor finance redress scheme (PS26/3, 30 March 2026) applies to 12.1 million agreements. Most people who financed a car between April 2007 and November 2024 have no idea whether they were affected. This page explains the signs of mis-selling, the eligibility tests, and what to do if you are unsure.
The Short Answer
If you financed a car on PCP or HP through a franchised or independent dealer between 6 April 2007 and 1 November 2024, there is a strong probability you were affected. You do not need to prove mis-selling to claim — the FCA scheme presumes it. The burden is on the lender to demonstrate that commission was adequately disclosed. In nearly all cases, it was not.
What Is Mis-Selling in Car Finance?
Car finance mis-selling under PS26/3 covers three situations:
1. Discretionary Commission Arrangements (DCAs)
Your dealer had the power to set your interest rate within a range — and earned more commission the higher they pushed it. This was not disclosed to you. You paid a higher rate than necessary in order to generate a larger payment to the dealer. This was banned by the FCA in January 2021 because it created a direct conflict of interest between the dealer and the customer.
2. Unfairly High Fixed Commission
Even where the dealer could not vary the rate, if the fixed commission paid by the lender to the dealer was at least 39% of the total cost of your credit and 10% of the loan amount, it is considered unfairly high under PS26/3 and is compensable. This applies to agreements before and after January 2021.
3. Contractual Ties
Where the lender had exclusive or preferential arrangements with certain dealers that were not disclosed to you, this is also compensable. Note that some manufacturer-captive arrangements are excluded from this specific ground — but DCA and high commission grounds still apply.
Signs You Were Likely Affected
You are more likely to have been affected if any of the following apply:
- You arranged finance at the dealership rather than independently
- You did not shop around for finance before visiting the dealer
- The dealer presented one or two finance options rather than explaining a range
- You were not told how much commission the dealer was earning from your agreement
- Your interest rate was above 5% APR
- You used a non-prime or specialist lender such as Moneybarn, MotoNovo, Advantage Finance or First Response
- The agreement was arranged before January 2021
- You financed a used car through an independent dealer
None of these is a guarantee of mis-selling — but the FCA scheme is designed for exactly this profile of agreement.
What You Do NOT Need to Prove
Under PS26/3 you do not need to prove:
- That you were specifically told an incorrect APR
- That the dealer acted dishonestly
- That you would have chosen a different lender or rate
- That you suffered specific financial hardship as a result
- That you kept your paperwork
The scheme operates on the basis that inadequate disclosure of commission arrangements is presumed to have created an unfair relationship. You simply need to have had an eligible agreement.
How to Check Your Eligibility
- Check your agreement start date — must be between 6 April 2007 and 1 November 2024
- Check your agreement type — must be PCP or HP, not lease or contract hire
- Check the lender was FCA-regulated — almost all mainstream and specialist car finance lenders are
- Check the agreement was in your personal name — not a limited company
If you no longer have your paperwork, use a soft credit check to identify lenders from the eligible period. See: Claiming Without Paperwork.
Related Pages
Frequently Asked Questions
I never complained at the time. Does that mean I accepted the terms?
No. The FCA scheme specifically addresses the fact that disclosure failures meant consumers could not have known there was anything to complain about. Not complaining at the time does not affect your eligibility.
My finance was arranged directly through a manufacturer — not a broker. Does that count?
Yes. Manufacturer-captive lenders such as Volkswagen Financial Services, Black Horse and Santander are all within PS26/3. The commission arrangement existed regardless of whether the lender had a brand connection to the vehicle.
I had a 0% APR deal. Am I excluded?
Zero APR agreements are excluded from PS26/3 on the basis that no interest was charged and therefore no harm from a higher rate occurred. However, check whether your agreement was genuinely 0% APR or whether a low rate was advertised to disguise commission paid another way.
My agreement ended years ago. Can I still claim?
Yes. The scheme covers agreements back to April 2007. Older agreements actually produce larger compensatory interest payments because interest accrues from the date of each overpayment.
You will be redirected to our partner’s website to complete your claim.
Think You May Have a Motor Finance Claim?
The FCA estimates average compensation of around £830 per eligible agreement, but eligibility and payment amounts vary. Some customers may receive nothing. Complaints about agreements started from 1 April 2014 should be submitted by 30 June 2026 to be considered under the earlier timetable. Different dates apply to older agreements. The scheme is currently subject to legal challenge, so dates and payment timings may change.
