Have you ever financed a car? If you have, you might be one of millions of UK drivers who could claim compensation due to hidden commissions in car finance deals. This unfolding scandal could see companies paying out billions, and you might be owed a chunk of it. In this blog, we’ll explain what’s going on, why it affects you, and how to get started with a claim. Plus, we’ll show you how National Claims can connect you with expert solicitors to make the process simple and stress-free.
What’s This Hidden Commission Scandal?
Let’s break it down. When you signed up for car finance—like a Personal Contract Purchase (PCP) or Hire Purchase (HP)—you might not have been told everything. Before 2021, car dealers and brokers often pocketed secret commissions from lenders. How? By nudging you into deals with higher interest rates than you needed to pay. These commissions were hidden from you, so you ended up overpaying without even knowing it.
The Financial Conduct Authority (FCA), the UK’s financial regulator, stepped in and banned these sneaky discretionary commission arrangements (DCAs) in January 2021. But before that, millions of finance deals—stretching back to 2007—could have included these unfair fees. Now, the FCA is digging into whether this was widespread mis-selling. If they confirm it, companies could owe billions in refunds.
On top of that, a big Court of Appeal ruling in October 2024 said that any commission paid to dealers without your clear consent was illegal. This widened the net, meaning even more people could claim. Experts now predict payouts might hit £30 billion—rivaling the huge Payment Protection Insurance (PPI) scandal.
Why Should You Care?
If you financed a car before 2021, this could affect you directly. Most new cars—around 80%, according to industry stats—and many used ones are bought on finance in the UK. That’s a lot of people who might have paid extra due to hidden commissions. The good news? You might not even need to fight for it. If the FCA sets up a compensation scheme, lenders could have to reach out to you with an offer.
For instance, say you financed a £12,000 car over five years. A hidden commission might have added £1,000 or more to your costs through a higher interest rate. Experts at MoneySavingExpert.com suggest the average payout could be around £1,100, though it depends on your deal. That’s money you could use for bills, a holiday, or even a new car!
What’s Happening Right Now?
The FCA is on the case. As of March 2025, they’re planning to decide by May—after a Supreme Court hearing in April—whether to launch a formal redress scheme. This follows their probe into commission practices, which kicked off in 2024. Meanwhile, the Supreme Court will rule on that October 2024 decision, and its verdict could shape how much companies end up paying.
However, it’s not all straightforward. Lenders are worried that massive payouts could hurt their businesses, and the government’s HM Treasury has asked the Supreme Court to think about the economy. Still, consumer groups say fairness matters more—if you were overcharged, you deserve your money back. For now, car finance firms have until December 2025 to reply to complaints, thanks to an FCA deadline extension.
How Much Compensation Can You Claim?
Wondering what you might get? Here’s a quick look:
- Small Loans (e.g., £5,000): You could claim £500–£800 if commissions inflated your interest.
- Average Loans (e.g., £10,000): Expect £1,000–£1,500, with £1,100 as a common estimate.
- Bigger Loans (e.g., £20,000+): Compensation might hit £2,000 or more, depending on the extra costs.
These are rough figures. Your payout depends on your loan size, interest rate, and repayment period. Some people have already won big through the Financial Ombudsman Service (FOS)—one driver got £3,500 back, including interest. To know for sure, you’ll need your finance details, but don’t worry—help is available.
How Do You Claim Your Money?
Ready to check if you’re owed something? Here’s an easy guide:
- See If You Qualify: Took out PCP or HP between 2007 and 2021? You might be eligible.
- Find Your Info: Dig out your finance agreement or note the lender, car details, and dates.
- Ask Your Lender: Write to them asking about commissions. The FCA has a sample letter on their site gov.uk/fca.
- Wait for Their Reply: They’ve got until December 2025 to respond, though some might act faster.
- Take It Further: If they say no or you’re not happy, the FOS can step in for free.
Sounds simple, but dealing with paperwork and lenders can feel overwhelming. That’s where National Claims comes in. They’ll link you with experienced solicitors who’ll handle everything—from contacting your lender to building your case—so you can sit back and relax.
Mis-sold Vehicle Finance Claims Checker
Disclaimer : The Mis-sold Vehicle Finance Claims calculation is illustrative, and under no circumstances should it be used or relied upon in the pursuit of a claim.
By working with a solicitor, you can ensure that your claim is handled professionally, giving you the best chance of a successful outcome. National Claims will connect you with legal experts who have experience in dealing with car finance mis-selling cases and who can help you recover the compensation you deserve.
Why Trust National Claims?
At National Claims, we know this stuff can be confusing. That’s why we’re here to help. We’ll put you in touch with solicitors who’ve tackled financial mis-selling cases like this before, including car finance and PPI claims. They’ll check your eligibility, figure out what you’re owed, and fight your corner—all with a friendly, clear approach. Many work on a no-win, no-fee basis, so there’s no cost unless you win.
What’s Next for This Scandal?
The coming months are key. The Supreme Court’s April 2025 decision could decide how big this gets. If the FCA launches a redress scheme, lenders might have to contact you directly—no need to chase them. That would make claiming easier than ever.
The story’s also hitting the headlines. On 11 March 2025, The Guardian said the FCA’s plans are “gaining traction,” while the BBC reported on 21 January 2025 that the government’s involvement has sparked debate about consumer rights versus industry health. For official updates, see the FCA’s page at gov.uk/fca-motor-finance.
Don’t Let This Pass You By
This car finance scandal is your chance to reclaim money you didn’t know you’d lost. Whether it’s £500 or £2,000, it’s yours to take back. So, why not act now? Check if you’re eligible and get the ball rolling.
Not sure how to start? National Claims will help you get in touch with experienced solicitors who’ll guide you through your claim with ease. Reach out today, and let’s turn this hidden commission headache into a win for you. You deserve fairness—and a bit of extra cash never hurts!
Contact National Claims today, and we will put you in touch with an expert solicitor who can guide you through the claims process.📞 Call us now free 0800 029 3849 or 📩 Submit an online enquiry to speak to our team. Your safety and well-being matter, and we’re here to help.
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