Are You Eligible for Compensation in the Car Finance Commission Scandal?
To be eligible for a claim in the UK car finance scandal, you must have taken out a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement between April 6, 2007, and November 1, 2024, for personal use. The agreement must have included an undisclosed commission arrangement that led to you paying higher interest charges. The Financial Conduct Authority (FCA) is currently proposing a compensation scheme for affected customers, with payouts expected in 2026.
Eligibility criteria
You are likely to be eligible if your finance agreement was affected by any of the following:
- Discretionary Commission Arrangements (DCA): A model that allowed car dealers or brokers to increase your interest rate in exchange for a higher commission. DCAs were banned on January 28, 2021, so any DCA claims must be for agreements made before this date.
- Undisclosed, unfairly high commission: Your commission was excessive but not revealed to you. The FCA’s guidance defines this as a commission greater than 35% of the total cost of credit and 10% of the overall loan.
- Contractually tied arrangements: The dealer claimed to search for the best finance deal but was actually tied to an exclusive arrangement with a single lender.
Important considerations
Who can claim:
- Personal use only: The vehicle must have been for personal use, though some business agreements may be covered if used primarily for non-business purposes.
- Past agreements: You can still claim even if the agreement is paid off, the car has been sold, or the vehicle was repossessed.
- On behalf of a deceased person: It is possible to claim for a person who has passed away.
Who is not eligible:
- Leasing (PCH): Personal Contract Hire (leasing) agreements are not included in the FCA’s investigation.
- Interest-free finance: Deals with a genuine 0% interest rate are not covered.
- Post-ban agreements: Deals taken out after January 28, 2021, cannot have included a DCA.
How to check for eligibility:
Contact your lender: The FCA advises contacting your lender directly to see if you had a commission arrangement. Some lenders, like Volkswagen Financial Services and Santander Consumer, have specific online forms for this.
Review your documents: Check your original finance paperwork for any mention of commissions.
Check your credit report: If you no longer have your paperwork, your finance provider may still be listed on your credit file.
Action for potential claimants:
- Complain to your lender: If you believe you are eligible, submit a complaint directly to your finance provider. This is free and you do not need to use a claims management company.
- Avoid claims management companies: The FCA and consumer advocates like Martin Lewis advise against using claims firms, as they charge a significant fee for a process you can follow for free.
- Wait for the compensation scheme: Lenders will begin contacting customers once the FCA’s redress scheme is finalized in early 2026. Submitting a complaint now may mean your case is handled sooner.
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