Thousands of UK drivers are discovering they may be owed compensation for mis-sold vehicle finance. If you took out hire purchase (HP) or PCP before 28 January 2021, you could have paid a higher interest rate due to hidden commission models. National Claims can assess your case quickly and connect you with experienced solicitors to pursue compensation.
Mis-sold vehicle finance often involved discretionary commission arrangements where brokers increased your interest rate to earn more commission. The FCA’s ongoing work indicates an industry-wide redress scheme could result in average payouts around £700 per agreement, depending on your contract and interest paid.
Why awareness is rising right now
Public awareness has surged because of the Financial Conduct Authority’s (FCA) review into historic commission models used in motor finance between 2007 and 2021. These “discretionary commission arrangements” (DCAs) let some brokers increase your APR and pocket a bigger commission—often without clear disclosure to customers. The FCA banned DCAs in January 2021 and launched a wide investigation in January 2024.
In 2025, the FCA formally consulted on an industry-wide compensation scheme for consumers treated unfairly between 2007 and 2024 and set out timings for complaint handling, with a pause on most cases lifting 31 May 2026 to align with any final scheme. Major lenders have set aside substantial provisions, signalling the scale of the issue.
Meanwhile, the Financial Ombudsman Service (FOS) reported complaint volumes at multi-year highs in 2024/25, with motor finance commission a key driver—another reason you’re hearing more about this every week.
Growing Concerns Around Mis-Sold Car Finance in the UK
Mis-sold vehicle finance is becoming a hot topic across the UK. From Manchester to Birmingham, drivers are finding out their car finance agreements may not have been as fair or transparent as they seemed.
A major factor behind this rise in awareness? Hidden commission deals between car dealerships and lenders — often not disclosed to customers — leading to unfair interest rates and inflated costs.
The Financial Conduct Authority (FCA) paused all vehicle finance complaints processing in January 2024 to investigate the scale of the issue. Since then, consumer complaints have soared. According to The Guardian, over 10,000 new complaints were lodged in just a few months after the announcement.
At National Claims, we’ve received more than hundreds of PCP finance claim submissions through our website. We work with highly experienced solicitors who are dedicated to helping you win your claim.
What Is Mis-Sold Vehicle Finance?
Mis-sold car finance happens when a customer isn’t given all the information needed to make an informed financial decision. This could involve:
- Undisclosed commissions between the lender and dealer.
- Lack of explanation of the agreement terms (e.g., balloon payments or high interest).
- Pressure selling tactics that rushed the buyer into signing.
- Unclear differences between types of agreements like PCP vs HP.
In most cases, the mis-selling involves Personal Contract Purchase (PCP) agreements, which became increasingly popular from 2007 onwards.
Signs You Might Have Been Mis-Sold Car Finance
Here are common red flags that could mean your car finance deal was mis-sold:
- You weren’t told the dealer was earning commission from your finance deal.
- You weren’t offered a full explanation of how PCP or HP finance worked.
- You felt pressured to accept the deal quickly.
- You weren’t shown alternative options or advised on affordability.
- You later discovered the interest rate was higher due to dealer incentives.
Even if you made payments on time and completed the agreement, you may still be eligible for a claim if the agreement was unfairly sold.
How Much Compensation Can You Claim?
Compensation can vary based on your individual case, but many claimants are seeing significant amounts returned. Some estimates suggest:
- Average claims range between £1,000 and £3,000
- In cases of high-value cars or long-term contracts, claims could exceed £10,000
- Claims may cover interest charges, overpayments, or losses due to unfair terms
The FCA is expected to release formal guidelines soon, which could lead to wider compensation for affected drivers. In the meantime, legal firms and claims specialists — like National Claims — can help assess your case and connect you with an experienced solicitor.
People Also Ask
1. What is PCP mis-sold car finance?
PCP mis-selling happens when you’re sold a Personal Contract Purchase agreement without clear information, such as hidden commissions or unaffordable payments.
2. How do I know if I was mis-sold car finance?
If you weren’t told about dealer commissions or didn’t understand the terms properly, there’s a strong chance you were mis-sold the finance.
3. Can I claim compensation for a car I no longer own?
Yes. Even if you no longer own the vehicle, you can still make a mis-sold finance claim if the agreement was unfair or misleading.
4. Is there a time limit for making a mis-sold car finance claim?
In general, you have six years from the agreement or three years from when you became aware of the issue. Always check with a solicitor for tailored advice.
5. Do I need to pay upfront to start a claim?
Many firms operate on a no win, no fee basis. National Claims, for example, connects you with solicitors who offer this service with no upfront cost.
How the FCA Is Responding
The Financial Conduct Authority has opened a major review of vehicle finance commission models. According to their update in January 2024, lenders must not reject complaints outright during the investigation period.
This pause in complaint handling could lead to a redress scheme, similar to the one seen during the PPI scandal — which resulted in over £38 billion paid back to consumers.
Why complaints and news coverage keep growing
- Regulatory milestones: The FCA investigation (from Jan 2024) and redress consultation (Oct/Nov 2025) created a clear path for consumers to challenge historic deals.
- Industry provisions: Major lenders have booked large provisions in anticipation of payouts, signalling serious potential liabilities.
- Ombudsman trends: The FOS has recorded elevated financial complaints in 2024/25, with motor finance commission a significant category.
- Consumer guidance: Public services (e.g., MoneyHelper) underline typical averages and explain how redress might work.
For a concise regulator overview, see the FCA’s page for consumers on car finance complaints and updates on DCAs.
What Should You Do If You Suspect Mis-Selling?
If anything about your car finance deal didn’t feel right, now is the time to act. Here’s what you should do:
- Find your finance documents – This includes PCP or HP agreements and related correspondence.
- Check for commission – Look for any mention of dealer incentives or high interest charges.
- Contact a claims expert – Firms like National Claims can help you understand your rights.
- Submit your complaint – You can do this directly or through a solicitor.
- Stay informed – Keep an eye on the FCA investigation and any announcements.
Why National Claims?
Navigating financial complaints can feel overwhelming — but National Claims is here to help. Whether you’re unsure about your rights or need support with the paperwork, we connect you with experienced solicitors who understand mis-sold car finance and work hard to fight your corner.
Final Thoughts: Don’t Miss Your Chance to Claim
The rising number of complaints shows just how widespread mis-sold car finance really is in the UK. If your agreement was between 2007 and 2021, you could be owed money — and the sooner you act, the better.
Don’t let hidden commissions and unclear deals cost you more than they should have. Check your agreement, get advice, and take the first step towards claiming what’s rightfully yours.
Ready to Take Action?
Start your claim today with National Claims and let us connect you with a trusted solicitor who can assess your case. There’s no upfront cost and no obligation — just clear advice and support when you need it most.
Get in touch now to see if you’re eligible to claim
About National Claims
This article was written by the National Claims content team. Our specialists have years of experience helping people across the UK with personal injury, road traffic accident, and housing disrepair claims. We work alongside regulated solicitors to ensure our information is accurate, up-to-date, and genuinely useful for anyone seeking to understand their rights after an accident.
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