Used Car Finance Claim — Does PS26/3 Cover Second-Hand Vehicles?
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.
One of the most common misconceptions about the FCA motor finance redress scheme is that it only covers new cars. It does not. Used car finance agreements are fully within the scope of PS26/3, and used car buyers were among the most affected by hidden commission arrangements.
Does PS26/3 Cover Used Car Finance?
Yes. PS26/3 covers all regulated PCP and HP agreements arranged between 6 April 2007 and 1 November 2024, regardless of whether the vehicle was new or used. The scheme covers the commission arrangement between the lender and the dealer — which applied to used car finance in exactly the same way as new car finance.
Why Used Car Buyers Were Particularly Affected
Used car finance frequently involved higher interest rates than new car finance for the same credit profile. Dealers arranging used car finance through Discretionary Commission Arrangements had both more flexibility and more incentive to push rates higher:
- Used car buyers often had fewer alternatives and less price transparency
- Higher APRs on used car agreements were more easily justified to the customer
- Commission earnings were proportionate to the total cost of credit — so a higher rate on a longer term produced larger commissions
- Many used car dealers operated across multiple lender panels, giving them scope to direct customers toward whichever lender offered the highest commission
Which Lenders Are Involved in Used Car Finance?
Used car finance was arranged through both manufacturer captive lenders and independent lenders. The most commonly involved include:
- Black Horse — one of the largest used car finance lenders in the UK
- Close Brothers Motor Finance — heavily involved in used car dealer finance
- Santander Consumer Finance — used across independent and franchised used car dealers
- MotoNovo Finance — specialist used car and non-prime lender
- Moneybarn — non-prime used car specialist
- Oodle Car Finance — online used car lender
- First Response Finance — used car non-prime specialist
- Startline Motor Finance — near-prime used car specialist
Used Cars and the DCA Confirmation Rate
MoneySavingExpert survey data from May 2024 found that customers of used car-focused lenders had among the highest DCA confirmation rates. Black Horse customers reported a 40%+ DCA confirmation rate in some survey groups. If you financed a used car through a dealer, the probability that a DCA was present on your agreement is high.
How Much Could You Receive?
The national average payout is £829. Used car agreements — particularly those with higher APRs or longer terms — often produce above-average payouts because the compensatory interest element accrues from the date of overpayment.
Use our car finance claims calculator to estimate your specific payout.
Related Pages
Black Horse Car Finance Claims
Close Brothers Car Finance Claims
Frequently Asked Questions
I bought a used car from a private seller. Is that covered?
No. PS26/3 covers agreements arranged through dealers and brokers. A private sale with separate finance arranged through a broker may be covered if the broker was FCA-regulated and earned a commission from the lender. A purely private transaction with no dealer or broker involved is not covered.
I bought a used car from a franchised dealer. Does it matter that it wasn’t a new car?
No. Franchised dealers arranged used car finance through the same captive lenders as new car finance. The agreement type — PCP or HP, regulated consumer credit — is what matters, not whether the vehicle was new.
The used car dealer I bought from has since closed. Can I still claim?
Yes. Your claim is against the lender, not the dealer. The dealer closing does not affect your eligibility. See: What If the Dealership Has Closed?.
I bought a used car from a car supermarket like Arnold Clark or Motorpoint. Is that covered?
Yes. Large used car retailers arranged finance through the same FCA-regulated lenders as franchised dealers. The commission arrangements that PS26/3 targets applied across all dealer types including car supermarkets.
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.
