If you’ve used car finance, you may be owed compensation. Find out how to complain and what to expect.
If you’ve used car finance to buy a car, motorbike or van, it’s very likely that the lender paid the broker (usually your car dealer) commission for arranging the loan.
On 25 October 2024, the Court of Appeal ruled on 3 cases involving car finance. In these cases, the Court decided it was against the law for the dealers to receive a commission from the lender without first telling the customer about the commission and getting their informed consent to the payment.
Getting informed consent will depend on the facts of each case. In these cases, it included telling the customer about the amount of commission and how it was calculated.
The lenders involved in the case have said they will challenge the decision, so it may go to the Supreme Court, which is the highest court in the UK. But unless the Supreme Court overturns this decision, this is now law, which car finance providers must follow.
Most car finance deals arranged through a dealer involve commission. If you’re not satisfied with your finance deal, you should complain.
If you’ve already made a complaint about a discretionary commission arrangement (DCA), find out what to do next.
If you’d like to receive an update on our work involving car finance complaints and what it means for you, sign up for email updates[1].
Giving providers longer to respond to complaints
Car finance providers are likely to receive a high volume of complaints in response to the Court judgment.
We previously gave providers until 4 December 2025 before they had to start responding to complaints involving a discretionary commission arrangement (DCA). We're now proposing to extend the 8 weeks that providers have to respond to any other type of car finance commission complaint. It’s important that any complaints are dealt with in a consistent, efficient and orderly way. Given the high number of possible complaints, there’s a risk this might not happen if we don’t provide an extension.
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.
Who this applies to
This applies to you if:
- you used car finance to buy a motor vehicle, for example a car, van, campervan or motorbike (this includes hire purchase agreements, such as Personal Contract Purchases[2])
If this doesn’t apply to you, but you have a complaint about another issue, find out how to complain[3].
How to complain
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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
If you’re not sure who your provider was, but the agreement was active in the last 6 years, you can 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[4].
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2
Getting a response from your provider
Once you've made a complaint, your provider should send you an acknowledgement.
We’re proposing to extend the 8 weeks that providers have to send you a final response to a non-DCA complaint until either:
- after 31 May 2025, or
- after 4 December 2025
We’ll confirm our new rules in December 2024.
If you’re unhappy with your provider’s response, you can then complain to the Financial Ombudsman Service (Financial Ombudsman).
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3
Taking your complaint to the Financial Ombudsman
It’s important you contact the Financial Ombudsman[5] by the date given in your provider's final response letter, or they may not be able to help.
We’re proposing to extend the deadline for taking your complaint to the Financial Ombudsman. We’ll update this page when we decide whether we’re going to do this.
If you’ve already made a complaint about a DCA
- If you’ve been told by your provider your loan didn’t involve a DCA, but you’re now concerned about commission following the Court judgment, you can make a new complaint to your provider.
- If you’ve had a final response from your provider about a DCA, but you’re unhappy with what they’ve said, you can take your complaint to the Financial Ombudsman.
- If you’ve already taken your DCA complaint to the Financial Ombudsman, you should contact the Financial Ombudsman to find out what your next steps should be.
Click the buttons below for step-by-step information on what to do if you’ve already complained about a DCA. We’ll update this tool to include non-DCA complaints, if we decide to give providers longer to deal with these complaints.
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.
Help making a complaint
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. You don’t need to use a claims management company (CMC).
The Financial Ombudsman has information about car finance complaints[5], and if you’re concerned about the process, you can get free guidance from MoneyHelper[1].
A CMC can make a complaint for you, but you’ll have to pay a fee[2]. If you're thinking about using a CMC, or another type of claims management service, find out what to expect[3].
Our review into discretionary commission arrangements (DCAs)
We’re currently investigating the use of DCAs in car finance.
Before January 2021, some lenders allowed brokers (the person that arranges your loan, for example, your car dealer) 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 discretionary commission arrangement (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 how much they were charged before the ban. Providers were rejecting most of these complaints, because they believe they haven’t acted unfairly and haven’t caused customers to lose out.
We plan to set out the next steps of our review in May 2025. But our work, including the timing and the types of commission we look at, will be influenced by whether the 3 car finance cases go to the Supreme Court and, if so, what they decide. So, our timeline may change.
If you’d like to stay up to date on our work and what it means for you, sign up for email updates[1].
Protect yourself from scams
Beware 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 about how to spot fake FCA communications[4], and some of the common tactics scammers use.
