Mis-sold car finance commission affects thousands of UK drivers who were unknowingly charged higher interest rates so that car dealers and brokers could earn secret commissions. If you took out a Personal Contract Purchase (PCP) or Hire Purchase (HP) agreement before 2021, you may be owed compensation. This article breaks down what mis-sold car finance means, how it impacts your finances, and how to claim back what you’re owed—with the help of National Claims connecting you to expert solicitors.
What Is Mis-Sold Car Finance Commission?
When you bought your car, you may have trusted the salesperson’s advice on the best finance deal. But behind the scenes, some car dealers were earning hidden commissions by selling you a finance agreement with a higher interest rate than necessary. This practice, known as discretionary commission, meant that the more interest you paid, the more money the broker or dealership made.
The Financial Conduct Authority (FCA) banned this type of commission model in January 2021 because it was unfair and misleading. According to the FCA, this practice cost consumers hundreds of millions of pounds.
Why This Matters: The Real Cost to You
If your finance agreement was mis-sold, you may have paid thousands more than you should have. The average overpayment in some cases ranges from £1,000 to £3,000, depending on the loan term, interest rate, and car value.
Worse still, many drivers weren’t told about the commission at all—making the deal non-transparent and therefore potentially unlawful.
Am I Eligible to Claim Compensation?
You may be eligible to claim if:
- You bought a car using PCP or HP finance
- The finance was arranged through a car dealership or broker
- Your agreement was signed before 28 January 2021
- You weren’t told about the commission
- You believe you paid a high or unclear interest rate
Even if you’ve already paid off the car, you can still start a claim.
? Tip: Look through your car finance paperwork or agreement terms. If there’s no mention of commission, or if your APR seems unusually high, you may have been mis-sold.
How Mis-Sold Car Finance Affects Your Wallet
Mis-selling doesn’t just mean being misled—it means you’ve lost money. The financial impact includes:
- Higher monthly payments
- Increased total cost of the car
- Potential credit score impact if you struggled with repayments
- Unfair advantage to dealers and brokers who profited from your loan
How Much Compensation Can You Claim?
If you were mis-sold a car finance deal, your compensation could include:
- Reimbursement of overpaid interest
- Return of the undisclosed commission
- Interest on the refunded amount
? Estimated figures range from:
- £1,000 to £3,000 for typical cases
- Up to £10,000 in some high-value or long-term finance agreements
Each case is different, so it’s worth having an expert review your agreement. National Claims can connect you with solicitors experienced in car finance mis-selling who will assess your eligibility and guide you through the claim process.
People Also Ask (PAA)
Q1. ❓ Can I claim for mis-sold car finance if the car is paid off?
Yes. Even if your car loan is settled or the car is sold, you can still make a compensation claim for any overpaid interest and hidden commission fees.
Q2. ❓ Is there a time limit to claim for mis-sold car finance?
Generally, yes. You usually have six years from the end of the finance agreement or from when you became aware of the issue to file a claim.
Q3. ❓ What type of car finance deals can be mis-sold?
Primarily PCP (Personal Contract Purchase) and HP (Hire Purchase) agreements, especially those set up through a dealership or broker who received a commission.
Q4. ❓ How do I know if commission was added to my car finance?
It often won’t be clearly stated. Look for unclear APR rates or vague finance terms. If in doubt, legal professionals can assess the documentation.
Q5. ❓ Can I make a claim even if I signed the paperwork willingly?
Yes. Even if you agreed to the deal, if crucial information—like commission—was withheld, it’s still potentially mis-selling.
What Should You Do Next?
If you suspect you were mis-sold car finance, don’t wait.
Here’s a step-by-step guide:
- Gather your paperwork – finance agreements, emails, or car dealership quotes.
- Check the dates – was the agreement before January 2021?
- Look for any mention of commission – if it’s missing or unclear, that’s a red flag.
- Contact National Claims – we’ll connect you with experienced solicitors who specialise in mis-sold car finance compensation.
How National Claims Can Help You
At National Claims, we help thousands of people across the UK claim back money they were unfairly charged. Whether it’s hidden car finance commissions, PPI-style mis-selling, or other consumer claims, we work with specialist solicitors who will fight for your right to fair compensation.
We take the stress out of the process, ensuring your claim is handled by professionals with your best interests at heart.
Start Your Car Finance Mis-Selling Claim Today
Don’t let hidden costs eat away at your wallet. If you’ve had a car on finance before 2021, you may be owed thousands in compensation—and it costs you nothing to find out.
? Contact National Claims now to check your eligibility and start your journey towards fair compensation.
? Your claim could make a real difference to your finances. Act now before time runs out.
