If you've used car finance, you may be owed compensation. Find out how to complain and what to expect.
If you've used motor finance to buy a car, motorbike or van, it's very likely that the lender paid the broker (the person that arranges your loan, usually your car dealer) commission for arranging the loan.
We've found that many firms broke our rules and didn't properly tell customers about commission arrangements.
On 1 August 2025, the Supreme Court ruled that in many cases commission payments could be legal. But in certain circumstances the failure to properly disclose commission arrangements could be unfair and therefore unlawful.
Your next steps
- Most car finance deals arranged through a dealer involve commission. If you’re concerned that you weren't told about commission and may have paid too much for your car finance, then you should complain.
- If you've complained and received an acknowledgement, you don't need to do anything. If you’ve not received an acknowledgement after 8 weeks, you should get back in touch with the firm.
- If you've complained and been sent a final response that you're not happy with, you should take your complaint to the Financial Ombudsman Service by the date you've been given.
- We've given providers until after 4 December 2025 before they have to start responding to any type of car finance commission complaint. We may extend this deadline as we'll be consulting on a compensation scheme.
If you'd like to receive updates on our work involving car finance complaints and what it means for you, sign up for email updates.
Compensation scheme
We’ll consult on setting up a compensation scheme for eligible car finance customers.
A scheme would get compensation to people who’ve lost out. It’s likely to be simpler than making a complaint and you won’t need to use a claims management company.
If the scheme goes ahead, we’ll set rules for how firms assess claims and calculate any compensation owed. We will also put checks in place to make sure firms are following our rules.
We’ll propose that the scheme covers discretionary commission arrangements (DCAs) – where the broker could adjust the interest rate offered to a customer – if they were not properly disclosed.
We'll also consult on which non-discretionary commission arrangements should be included.
How much you could get
If you're owed money, the amount you get will depend on many factors. But based on our work so far, most people would probably get less than £950 per agreement.
This would include interest, which is normally paid on top of compensation. This should be fair and proportionate. We're likely to propose an interest rate that would work out around 3% per year.
What we’ll do next
Before we launch any scheme, we’ll get views on how it will work. For example, whether you would need to opt in or opt out of the scheme.
- Under an opt-in compensation scheme, you would have to confirm to your provider by a certain date that you wished to be included.
- Under an opt-out compensation scheme, you would automatically be included unless you opt out.
Whichever approach we propose, we anticipate requiring firms as far as possible to make customers aware they may be eligible and what they may need to do.
We plan to publish a consultation in October 2025 setting out how we think the compensation scheme should work. We'll then review any feedback before deciding. If the scheme goes ahead, the first payments should be made in 2026.
Read more about what we have to consider before we introduce a compensation scheme.
Protect yourself from scams
We’ve received reports of scammers calling people and pretending to be from car finance lenders, offering fake compensation. It's important to remember there's no compensation scheme in place yet.
If someone calls you offering compensation, hang up immediately.
You should also be aware of scammers pretending to be from the FCA. We'd never ask you to transfer money to us and we'd never ask for your bank account PINs and passwords.
Find out how to spot fake FCA communications.
Who this applies to
We will set out our proposals for the scope of any compensation scheme when we publish our consultation. But this may apply to you if:
- you used car finance for a motor vehicle, for example a car, van, campervan or motorbike (this includes hire purchase agreements, such as Personal Contract Purchases)
If this doesn’t apply to you, but you have a complaint about another issue, find out how to complain.
Using a claims management company (CMC)
You won't need to use a CMC or a law firm to take part in any compensation scheme we set up.
You can complain now for free without using one, and you don’t need to use a CMC to find out if you’re eligible. If you’re unsure who your provider was, there are a few ways you can check.
If you sign up to a CMC now, you may end up paying for a service you don't need, including up to 30% in fees out of any compensation you may receive.
Already signed up with a CMC or law firm?
If you decide you no longer want to use a CMC or law firm, you can end your agreement. But you may be charged a fee. This fee should be reasonable and should reflect the work the firm or CMC has already done. Find out what to expect if you do decide to use a CMC.
How to complain
Follow the steps below to make a complaint about commission.
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1
Get in touch with your provider (either your lender or broker)
Tell your provider why you want to complain about commission on your car finance agreement. Include as much information as you can to help them find your loan. For example, your:
- name
- policy number
- date of the agreement
- vehicle number plate
- address when you took out the agreement
Finding your provider
If you’re not sure who your provider is:
- Check old bank statements.
- Contact the dealer where you got the car.
- If your agreement was active in the last 6 years, you can also try checking your credit file as your provider may be listed on there. Find out how to access your credit file for free from the Information Commissioner’s Office.
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2
Getting a response from your provider
Once you've made a complaint, your provider should send you an acknowledgement within 8 weeks. If it doesn't, you should follow up to check if it's received your complaint.
Under our current rules, it won’t have to send you a final response until after 4 December 2025. But as we’re consulting on a compensation scheme, we may extend this deadline.
If you're unhappy with your provider's response, you can then complain to the Financial Ombudsman Service. The Financial Ombudsman is a free service that settles complaints between consumers and businesses that provide financial services.
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3
Taking your complaint to the Financial Ombudsman
It’s important you contact the Financial Ombudsman by the date given in your provider's final response letter, or they may not be able to help.
If you're sent (or have been sent) a final response to a complaint during the following periods:
- For a complaint about a DCA, between 12 July 2023 and 20 June 2024.
- For a complaint about any kind of motor finance commission (including DCAs), between 21 June 2024 and 29 January 2026.
You'll have until the later of 29 July 2026 or 15 months from the date the final response letter was sent to take your complaint to the Financial Ombudsman.
If you’ve already been sent a final response and now have more time to take your complaint to the Financial Ombudsman, your provider will write to you and let you know.
It's free and simple to complain to your provider and then the Financial Ombudsman if you're unhappy with a financial product or service. The Financial Ombudsman has information about car finance complaints. If you're concerned about the process, you can get free guidance from MoneyHelper.
You don’t need to use a CMC.
Taking your complaint to court
You can also bring a claim about your car finance commission to court. If you’re considering this option, you should think about getting independent legal advice.
Our review into commission arrangements
In January 2024, we launched an investigation into the use of discretionary commission arrangements (DCAs) in car finance.
Before January 2021, some lenders allowed brokers to adjust the interest rates they offered customers for car finance. The higher the interest rate, the more commission the broker received. This was known as a DCA.
DCAs created an incentive for brokers to increase how much people were charged for their car loan. We banned this practice in 2021. But there have since been a high number of complaints from customers about whether they were properly told about the commission involved in the deal.
Providers were rejecting most of these complaints, because they believed they hadn’t acted unfairly and hadn’t caused customers to lose out.
In October 2024, we also started looking at any relevant motor finance commission complaints, including where there was no DCA in place. This followed a decision by the Court of Appeal.
We gave providers until after 4 December 2025 before they had to start responding to any type of car finance commission complaints.
We did this as it’s important that any complaints are dealt with in a consistent, efficient and orderly way. Given the high number of possible complaints, there was risk this may not have happened if we hadn't given providers longer to respond.
Managing this risk is important because this borrowing isn’t covered by the Financial Services Compensation Scheme (FSCS). This means if your provider goes out of business, you may not get the money you’re owed.
Our review found that many firms broke our rules and didn’t properly inform customers about commission arrangements.
Following our review and the Supreme Court's decision (PDF), we've said we'll consult on setting up a scheme to compensate eligible car finance customers.
If you'd like to stay up to date on our work and what it means for you, sign up for email updates.
